Market Outlook MOR2020

CBRE|WTW RESEARCH | APAC
MALAYSIA
INTRODUCTION
‘WHEN WILL THE MARKET IMPROVE ? The property market

regained some strength in 2019, the underlining optimism
attributable to continued market resilience and market players
who have remained unwavering despite the economic
turbulence.
On the broader front, over-supply, down trending transactions,
weaker prices are symptoms of market uncertainty which may be
due to inconsistency of government policies and lack of
comprehensive and timely market information.
While over-supply is currently found in almost all sectors, this
could be addressed in the mid-term if the economy turns around
to prospects of high sustainable growth from its current outlook
of uncertainty and doldrums. Bottom line, we want carefully
crafted government policies which are then implemented
consistently, long term.
FOO GEE JEN
MANAGING DIRECTOR
CBRE | WTW
FORMATION
In 1975, C H Williams Talhar Wong & Yeo (WTWY)
CBRE | WTW entered into an agreement in May was established in Sarawak. C H Williams Talhar &
2016 to form a joint venture to provide a deep, Wong (Sabah) (WTWS) was established in 1977.
broad service offering for the clients of both firms.
This combines Malaysia’s largest real estate services The current management is headed by Group
provider, WTW’s local expertise and in-depth Chairman, Mohd Talhar Abdul Rahman.
relationships in Malaysia with CBRE’s global reach
and broad array of market leading services. The current Managing Directors of the WTW Group
operations are:
The union of CBRE and WTW is particularly
• CBRE | WTW: Foo Gee Jen
significant because of our shared history. In
the1970s, CBRE acquired businesses from WTW in • C H Williams Talhar & Wong (Sabah) Sdn Bhd:
Singapore and Hong Kong, which remain an integral Leong Shin Yau
part of CBRE’s Asian operations.
• C H Williams Talhar Wong & Yeo Sdn Bhd:
Robert Ting Kang Sung
The wider WTW Group comprises a number of
subsidiaries and associated offices located in East
ABOUT CBRE
Malaysia including:
• C H Williams Talhar Wong & Yeo Sdn Bhd (1975) CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and
S&P 500 company headquartered in Los Angeles, is
• C H Williams Talhar & Wong (Sabah) Sdn Bhd the world’s largest commercial real estate services
(1977) and investment firm (in terms of 2014 revenue). The
• C H Williams Talhar & Wong (Brunei) Sdn Bhd Company has more than 70,000 employees
(excluding affiliates), and serves real estate owners,
ABOUT WTW investors and occupiers through more than 400
offices (excluding affiliates) worldwide. CBRE offers
Colin Harold Williams established C H Williams & Co strategic advice and execution for property sales and
in Kuala Lumpur in 1960. C H Williams & Company leasing; corporate services; property, facilities and
merged in 1974 with Talhar & Company founded by project management; mortgage banking; appraisal
Mohd Talhar Abdul Rahman and the inclusion of and valuation; development services; investment
Wong Choon Kee to form C H Williams Talhar & management; and research and consulting.
Wong (WTW).
2
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2020 | MALAYSIA CBRE | WTW RESEARCH | © 2020 CBRE | WTW
TABLE OF CONTENTS
04 07
ECONOMY & PROPERTY MARKET
UPDATES ON MAJOR OVERVIEW
POLICY/INFRASTRUCTURE
17 38
RESIDENTIAL OFFICE
49 59
RETAIL INDUSTRIAL
70 84
HOTEL FEATURE ARTICLES
87 91
SIGNIFICANT OUR NETWORK
TRANSACTIONS
3 CBRE | WTW RESEARCH | © 2020 CBRE | WTW

ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2020 | MALAYSIA
ECONOMY & UPDATES
ON MAJOR POLICY/
INFRASTRUCTURE
ECONOMY
MALAYSIA
MODERATE PERFORMANCE Labour market conditions were stable with employment

growth at 2.1% (2Q 2019: 2.1%). The unemployment
GDP growth was moderate at 4.4% in 3Q 2019 (3Q rate remained unchanged at 3.3%.
2018: 4.4%; 2Q 2019: 4.9%) and is expected to be
within Bank Negara Malaysia’s 2019 projections (4.3%- LENDING AND LIQUIDITY
4.8%).
Total lending as at 3Q 2019 was RM1.74 trillion, up 4%
Private consumption increased by 7.0% (2Q 2019: y-o-y (3Q 2018: RM1.68 trillion). The Overnight Policy
7.8%) in line with the long term trend while private Rate (OPR) has reduced to 3.00% in May 2019.
investment expanded by 0.3% (2Q 2019: 1.8%).
Household loans including property loans expanded y-o-y
Public investment further shrank (3Q 2019: -14.1%; 2Q (3Q 2019: 30.1%, 3Q 2018: 29.4%). A slight rise in the
2019: -9.0 %) while public consumption slightly residential loans approval rate was seen (3Q 2019:
increased by 1.0% in 3Q 2019 (2Q 2019: 0.3%). 44.2%; 3Q 2018: 40.2%). Value of loans approved for
residential properties 3Q 2019 was RM30.5 billion (3Q
Foreign Direct Investment (FDI) decreased to RM2.9 2018: RM27.3 billion).
billion as compared to RM4.4 billion during 2Q 2019.
GLOBAL RISKS AND UNCERTAINTIES
Exports decreased 1.9% y-o-y to RM247.0 billion (3Q
2018: RM251.8 billion) while imports also decreased Budget 2020 focused on maintaining the status quo,
5.8% to RM213.5 billion. The trade surplus was RM33.5 which may not be the wisest option. Bold, new decisive
billion (2Q 2019: RM30.4 billion). policies are needed to attract foreign investors as well as
local entrepreneurs. Investors being asked to take huge
The services and manufacturing sectors remained the risks as global headwinds increase and competition
growth drivers: 5.9% (2Q 2019: 6.1%), and 3.6% (2Q intensifies, need to be assured that the rewards they reap
2019: 4.3%), respectively. The inflation rate was 1.3% in from taking these risks will not be lost from inconsistent
3Q 2019 (2Q 2019: 0.7%). government policies and support.
CONTRIBUTION OF EXPENDITURE GDP GROWTH BY SECTORS

COMPONENTS TO REAL GDP GROWTH
Private Activities Public Acivities Agriculture Mining and Quarrying
Manufacturing Construction
Exports of Goods & Services Imports of Goods & Services Services Real GDP Growth
8.0
6.0
279,736
300,000 4.0
229,721
203,380
250,000 2.0
Growth (%)
200,000 0.0
RM mil
150,000 -2.0
60,867
100,000 -4.0
50,000 -6.0
0 -8.0
3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019
Source: Bank Negara Malaysia, CBRE | WTW Research Source: Bank Negara Malaysia, CBRE | WTW Research
5
UPDATES ON MAJOR POLICY/INFRSTRUCTURE
MALAYSIA
MAJOR POLICY
DESCRIPTION AUTHORITY/AGENCY EFFECTIVE DATE REMARKS
Fund for Affordable Bank Negara Malaysia 1 September 2019 Maximum monthly household income increased to
Homes to 31 December RM4,360, maximum property unit price increased to
2020, or until the RM300,000.
fund is exhausted.
Real Property Gains Ministry of Finance (MOF) 1 January 2020 The base year for asset acquisition revised from
Tax (RPGT) January, 2000 to January, 2013.
Quit Rent Federal Territories Land 1 January 2020 Quit rent for strata properties will now be payable
and Mines Office individually, to be known as Parcel Rent.
Minimum Value of Sarawak Government 23 May 2019 The prescribed amount for foreign acquisition of
Property for Foreign landed residential property shall be not less than
Acquisition (revision) RM500,000 (throughout the State of Sarawak except
in Sarawak Kuching), and shall be not less than RM600,000 for
Kuching Division.
Minimum Value of Sabah Government 1 January 2020 The threshold level for residential home ownership by
Residential Home foreigners have been lowered to RM750,000 from
Ownership by RM1 million. Applicable only for residential homes
Foreigners in Sabah that have been issued with Occupation Certificate
and remain unsold for more than 9 months.
MAJOR INFRASTRUCTURE
PROJECTS LOCATION COMPLETION YEAR REMARKS
RAIL
East Coast Rail Link (ECRL) Port Klang, Selangor - 2026 Dungun to Mentakab Section - under
Kota Bharu, Kelantan construction
Electrified Double Track Project Gemas - Johor Bahru 2021 Under construction
(EDTP) Gemas-Johor Bahru
Rapid Transit System (RTS) Bukit Chagar – Beyond 2024 Revised and subject to the
Woodlands, Singapore Government’s confirmation
LRT Line 3 Bandar Utama - Klang 2024 Under construction
MRT 2 (SSP Line) Sungai Buloh - Putrajaya 2022 Under construction
HIGHWAY/EXPRESSWAY
Damansara-Shah Alam Sungai Penchala – 2020 Under construction

Highway (DASH) Shah Alam
East Klang Valley Expressway Sungai Long - Ukay 2020 Under construction
(EKVE) Perdana
Lebuhraya Putrajaya-KLIA MEX - KLIA - KLIA 2 2020 Contract awarded
(MEX II)
Pan-Borneo Highway Tawau - Kuching 2022/2023 Under construction
Sungai Besi-Ulu Kelang Sungai Besi - Cheras - 2020 Under construction

Elevated Expressway (SUKE) Ampang - Ulu Kelang
West Coast Expressway (WCE) Taiping - Sabak Bernam - 2022 Completed section 5, 9, 10
Banting
OTHERS
West Port Expansion West Port, Port Klang 2040 Under construction
(380 acres land under the (2 terminals to be completed by
sea) 2021)
6
PROPERTY MARKET
OVERVIEW
PROPERTY MARKET OVERVIEW
MALAYSIA
OVERALL LANDED HIGH RISE PURPOSE- SHOP- RETAIL INDUSTRIAL HOTEL

RESIDENTIAL RESIDENTIAL BUILT OFFICE
OFFICE
2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020
KLANG VALLEY
Klang Valley u u u p u u q q u u u u u p u p
Seremban u u u u u u u u u u u u u u u u
PENANG
Penang u u u u u u u u u u u u u u u u
Alor Setar u u u u u u u u u u u u u u u u
Ipoh u u u u q u u u u u u u u u u u
ISKANDAR MALAYSIA
Iskandar Malaysia u u u u q q q q u u q q u u u u
Melaka u u p p u u u u u u u u u u u u
Batu Pahat u u u u u u u u u u u u u u u u
EAST COAST
Kuantan q u q u q u q u u u u u u u u u
Kota Bharu u u u u q q u u u u u u u u u u
Kuala Terengganu
u u u u u u u u u u u u u u u u
SABAH
Kota Kinabalu u u u u q u q u u u u u u u u u
Lahad Datu u u q u - - - - u u u u u u - -
Tawau u u u u u u u u u u u u u u u u
Sandakan u u u u u u - - u u u u - - u u
Labuan u u q u q u u u u u u u u u u u
SARAWAK
Kuching u u u u q u u u u u u q u u - -
Miri u u p u u q u u u u u u u p u p
Bintulu u u u p u u u u u q q q u u u u
Sibu u u u u u u u u u u q u u p u u
8
KLANG VALLEY
Malaysia’s property market gained traction as transaction activity in 3Q 2019 went up by 5.6% to
83,186 transactions and 4.7% to RM34.7 billion respectively from the same time last year.
Klang Valley (KV), which constitutes about one-quarter of RETAIL UNCHANGED

Malaysia’s property market, grew by 1.3% in volume to
77,241 in 2018 but transaction value declined by 2.7% The retail sector is also expected to remain status quo
from 2017 to RM65.7 billion. with generally healthy retail revenue and sustained
shopper footfalls; same occupancy and rental rates.
3Q 2019 saw an improvement when transaction volume
expanded 7.7% (20,626 transactions) while value The incoming supply of retail space outside Kuala Lumpur
increased 13.7% (RM15.8 billion). is 5.6 million square feet compared to 1.49 million
square feet in Kuala Lumpur city.
RESIDENTIAL TRANSACTIONS INCREASED,
BUT OVERHANG ALSO UP INDUSTRIAL STILL BRIGHT
As of 3Q 2019, residential sector in the KV reported The industrial sector continues to be the bright spot as
8.7% growth in transactions to 15,973 units and 4.2% to approved investments for manufacturing from January to
RM8.33 billion in value from a year ago. June 2019 in KV was RM5.99 billion of which 63% was
contributed by foreign investment.
KV’s residential overhang increased by 5.1% y-o-y and
2.4% q-o-q in 3Q 2019 to 12,007 units. Close to one- Major highlights in the KV’s industrial market would be
third of the overhang in KV was made up of residential the West Coast Expressway (WCE) that will boost
properties priced between RM200,000 and RM500,000. connectivity and spur the logistics activities. The ongoing
development of Digital Free Trade Zone (DFTZ) in
ALL QUIET ON THE OFFICE FRONT Sepang is anticipated to stimulate higher growth in air
logistics activities.
4 new office buildings increased purpose-built office
space in KV to 111.9 million square feet. Vacancy rate HOTEL/TOURISM THE OTHER BRIGHT SPOT
rose by 1.0% y-o-y (3Q 2018: 18.6%) and may breach
the 20% mark by 2022 in view of the 10.23 million Tourist arrivals for Malaysia rose by 4.9% y-o-y from
square feet in the pipeline. January to June 2019. Average occupancy rate (AOR) of
hotels in and outside Kuala Lumpur was 81% and 64%
The average office rental rate and yield were at RM6.95 respectively in 3Q 2019 while the average room rate
per square foot and 5.5% - 6.0% respectively as of 3Q (ARR) increased marginally to RM260 per room.
2019. Exchange 106, Sapura HQ, HSBC HQ and Affin
HQ – each housing more than half a million square feet
of space – are upcoming completions.
TRANSACTION ACTIVITIES IN KLANG VALLEY

Total Volu me (No. of Units) Total Valu e (RM bil.)
100,000 80
70
80,000
60
Volume (No. of Units)
50
Value (RM bil.)
60,000
40
40,000 30
20
20,000
10
0 0
2015 2016 2017 2018 9M 2015 9M 2016 9M 2017 9M 2018 9M 2019
Abbreviation: bil. = billion
Source: NAPIC, CBRE | WTW Research
9
PENANG
The Penang property market remained flattish in 2019 as the market activity continued to be
lacklustre. The subdued market would extend to 2020. Under such prevailing market condition there
are opportunities for good buys including for land banking. The implementation of the Penang
Transport Master Plan (PTMP) and major land reclamation projects are set to be the main catalysts
and provide new opportunities for the property market.
PREVAILING FLATTISH MARKET TO for good buys. There have also been increased interest by
CONTINUE prospective purchasers from Hong Kong for residential
properties in Malaysia, including Penang, due to the
The activity of property transactions in Penang continued current unrest and chaos in in their country.
to be lacklustre through Jan – Sept 2019. According to
the recently released statistics of NAPIC, a total of OPPORTUNE TIME FOR LAND BANKING
12,647 properties were transacted in Penang State in Jan
– Sept 2019, representing a marginal increase of 0.4% As land owners rationalise their property portfolio under
compared to the corresponding period of Jan – Sept the prevailing lacklustre market, more lands are made
2018. available for sale. Hence, it is an opportune time for
developers and investors, with the financial strength and
The total value of properties transacted in Penang State appetite, to enhance their land bank.
was approximately RM6.51 billion in Jan – Sept 2019, a
reduction of 13.0% as compared to the corresponding
period of Jan – Sept 2018. VOLUME OF UNSOLD UNITS (2Q 2019)
The prevailing subdued market would extend to 2020

Commercial 4% Industrial 2%
due to the challenging market scenario as well as lack of
(158 units) (93 units)
boosters in the property market.
OPPORTUNITIES IN BUYERS’ MARKET

4,180 units
According to the recently released property overhang
data as at 2Q 2019 by NAPIC, the volume and value of
unsold units remain a concern. Residential properties
continued forming the bulk of the property overhang in Residential 94%
terms of total units and value of unsold units in Penang (3,929 units)
State. Under the buyers’ market, there are opportunities
VOLUME AND VALUE OF PROPERTY VALUE OF UNSOLD UNITS BY SECTOR (2Q 2019)
TRANSACTION (2015 - JAN TO SEPTEMBER 2019)
Total Volume (No. o f Units)

Total Value (Value RM bil) Commercial 5% Industrial 4%
(RM160.65 mil) (RM151.84 mil)
25,000 14.00
12.00
20,000
10.00
Value (RM bil.)
15,000 8.00
RM3.57 bil.
10,000 6.00
4.00
5,000
2.00
- - Residential 91%
2015 2016 2017 2018 9M 9M 9M 9M 9M (RM3,262.17 mil)
2015 2016 2017 2018 2019
Abbreviation: bil. = billion ; mil = million
Abbreviation: bil. = billion
10
PENANG
In 2019, developers which have entered into Sale and The proposed PIL 1 Highway will alleviate traffic
Purchase Agreements to acquire sizeable lands in congestion on the Tun Dr Lim Chong Eu (LCE)
Seberang Perai include Tambun Indah Land Berhad (land Expressway and adjacent arterial roads. It has been
at Simpang Ampat) and Scientex Berhad (land at Tasek approved by DOE and the tendering of the project is
Gelugor). reported to be in the process.
Sizeable development land will also be made available Package 2 of the Paired Highway (Air Itam-Tun Dr Lim
from land reclaimed for the future phases of The Light Chong Eu Expressway) will connect the Air Itam portion of
township, and the ongoing reclamation of Seri Tanjung the Thean Teik Expressway to the Tun Dr Lim Chong Eu
Pinang Phase 2 and the foreshores of Gurney Drive and Expressway near the Marine Department. Preliminary
Queensbay area. works has started and major construction will begin by
1Q 2020. PTMP together with the land reclamation
The Penang State Government is set to implement the projects are expected to be the main catalysts to provide
Penang South Reclamation (PSR) project, the new opportunities for the property market.
development of three man-made islands with a total size
of nearly 4,500 acres. The Environmental Impact
Assessment (EIA) report of the PSR project has received
conditional approval and a masterplan design
competition has been rolled out inviting multi-disciplinary
consortiums to provide a development concept for PSR.
PENANG TRANSPORT MASTER PLAN
The Penang Transport Master Plan (PTMP) will set the

framework for an integrated and modern transport
system. The priority projects to be delivered under PTMP
are the Bayan Lepas LRT (BL LRT) line, the Pan Island Link
1 (PIL 1) Highway and Package 2 of the Paired Highway
(Air Itam-Tun Dr Lim Chong Eu Expressway).
The proposed BL LRT line as the first LRT system in

Penang, will provide direct airport transit to major
destinations on the island. Final alignment approval
followed by planning, design and tender process is
scheduled to be completed by 2020.
Island B Island A
Island C 1,400 acres 2,300 acres
800 acres
Proposed Penang South Reclamation (PSR) Bayan Lepas LRT Line

Source: PSR EIA Report Source: Penang Transport Master Plan website
11
ISKANDAR MALAYSIA
Iskandar Malaysia’s property market is expected to move at a slow pace. The region continued to lure
direct investments from local and foreign investors as confirmation of the Rapid Transit System
provided some excitement.
TRANSACTION ACTIVITY RECOVERING

COMMITTED INVESTMENT GROWING
In the first nine months of 2019, 16,709 properties were
transacted in Iskandar Malaysia (IM), a growth of 2% as The industrial sector remained active with both
compared to 16,358 properties in the corresponding transaction volume and value of industrial properties
period of 2018. Total value amounted to RM9,399 showing positive growth. The total approved investments
million, a growth of 7% from RM8,746 million in 1Q - in the manufacturing sector for Johor state was RM4
3Q 2018. billion in 1H 2019.
MODERATE SECTOR PERFORMANCE IM has successfully secured committed investments of

RM16.75 billion in first half of 2019, bringing the total
Landed residential remained stable while high-rise cumulative committed investment to RM302.09 billion of
residential continued to be plagued by oversupply. House which approximately 57% (or RM172.3 billion) has been
buyers shifted to the primary market, thanks to realised.
government initiatives encouraging price discounts.
Mainland China led foreign investments with a total
The purpose-built office sector in 2019 saw vacancy rates commitment of RM40.65 billion. The investments are
rise due to the influx of new office buildings in recent mainly in mega property developments such as Country
years. Downward adjustment for rental rates are expected Garden Danga Bay, Country Garden Central Park, Forest
as the building owners compete for tenants. City, R&F Princess Cove, Greenland Jade Palace, et
cetra. Singapore is ranked second, mainly invested in the
For the retail sector, IM welcomed 5 new shopping malls manufacturing, healthcare and education sectors.
in 2019. Shopping malls which are located at strategic
locations and well-designed for various activities will ISKANDAR MALAYSIA TO BE EXPANDED
command high occupancy rates and footfall.
The area of IM is currently under planning to be
The hotel sector remained healthy in the short term with expanded, i.e. doubled up from 2,217 square km to
another 4 hotel projects launched in 2019, adding up to 4,749 square km, including Simpang Renggam and
12 on-going projects. The recent completion of several Renggam in Kluang district, Pontian town in Pontian
serviced apartment projects and increasing trend of district, and Pengerang and Desaru in Kota Tinggi district.
apartments online booking has undeniably exacerbated The region will then be named Greater Iskandar
the competitiveness of the hotel market. Malaysia.
TRANSACTION ACTIVITIES (2015 to Jan-Sep 2019)
Volume (No. of Units) Value (RM mil)
30,000 20,000
25,000
15,000
Volume (No of Units)
20,000
Value (RM mil)
15,000 10,000
10,000
5,000
5,000
0 0
2015 2016 2017 2018 9M2015 9M2016 9M2017 9M2018 9M2019
12
ISKANDAR MALAYSIA
SINGAPORE RECESSION RIPPLING ISKANDAR The government has also called for a tender to appoint
MALAYSIA both the commercial and technical advisory consultants
to review the feasibility of the High Speed Rail (HSR)
Just a bridge’s distance to the south, neighbouring project to assist the government in making a decision
Singapore’s GDP growth rate plunged to a new low for before end of May 2020.
first three quarters of 2019. Singapore sliding into a
recession could deeply impact the hundreds of thousands On the other hand, the construction of the Gemas-Johor
of Malaysians working there as well as retail spending by Bahru electrified double-tracking project was slightly
Singaporeans who visit Iskandar Malaysia. ahead of progress with approximately 37% completed as
of April 2019. Travelling time between KL Sentral and JB
The spending patterns of these consumer groups are Sentral could be reduced from 6 hours to 3.5 hours.
expected to moderate. In addition, Singaporeans are
anticipated to reduce their spending in Iskandar Malaysia In Budget 2020, RM85 million will be allocated by the
(IM) as well as putting off property investments. government to ease the congestion at Johor Bahru
Singapore-based companies might also be influenced to Causeway and Second Link, including provide additional
scale back investments. counters for motorcyclists at the Customs, Immigration
and Quarantine (CIQ) complex. Both the immigration
INFRASTRUCTURES IN THE PIPELINE and PLUS highway counters would also be streamlined to
improve traffic flow in the CIQ complex.
The Malaysia government has agreed to proceed with the
Rapid Transit System (RTS) with an estimated cost at Another two projects received an allocation of RM220
RM3.16 billion. Three (3) new agreements with the million: Ramp to be built along the Senai-Desaru
Singapore government will be signed by end of April Expressway (SDE) at Bandar Penawar to curb flooding
2020 amending some of the scope and structure of the and construction of Kota Tinggi bypass bridge to ease
project with target for completion beyond 2024. traffic congestion.
13
EAST COAST
Two high-impact game-changers will be East Coast Rail Link (ECRL) and Kuantan Port.
A POTPOURRI OF ACTIVITIES ECERDC in partnership with Technische Universitat

Munchen (TUM) has established the Asia Centre of
The East Coast covers a land area of about 50% of Excellence for Smart Technologies (ACES) at the Pahang
Peninsular Malaysia comprising the states of Kelantan, Technology Park, envisioned to serve as a skills
Terengganu, Pahang. It is home to over 4.5 million development hub.
people and is transforming into a distinctive, dynamic and
competitive destination for investments. Two high-impact game-changers the East Coast Rail Link
(ECRL) and the expansion of Kuantan Port are expected
In June 2019, the Federal Government through the East to facilitate further investments. ECRL will unlock new
Coast Economic Region Development Council (ECERDC) tourism hubs and transit-oriented developments along its
launched the ECER Master Plan 2.0 (2018-2025). The alignment whilst the expansion of Kuantan Port in Pahang
ECER Masterplan identified seven Key Development can cater to larger vessels and spur the container cargo
Areas (KDA) or Nodes of development. This will be a industry.
major boost to the East Coast region.
GROWTH SECTORS
ECONOMY
On the back of the on-going key infrastructure projects,
Since 2007, approved investments have totaled more the Region is also set to experience a wave of growth in
than RM110 billion which could generate over 100,000 logistics-related activities which has been identified as a
new jobs and 10,000 business opportunities. Much of new key driver, in addition to Manufacturing; Oil, Gas
this development will be in the ECER Special Economic and Petrochemicals; Tourism and Agribusiness sectors.
Zone (SEZ ), covering a 25km by 140km strip that
extends from Kertih in Terengganu to Pekan in Pahang. The Region’s rich resources has enabled the development
of a competitive manufacturing destination. The
Business activities have revolved around the timber and automotive sector in ECER is well-established: HICOM
fisheries industries and in recent years the petrochemical Automotive Manufacturing Malaysia (HAMM) within the
industry has become an integral part of the economy. Pekan Automotive Park is one of the leading contract
Tourism and the service sectors have also become two manufacturers for Mercedes-Benz and Volkswagen. The
high areas of employment and very important cogs in the Park also houses multiple OEM parts suppliers.
machinery of economic growth.
The Malaysia China Kuantan Industrial Park (MCKIP) is
Tourism is proposed as a major stimulant to the modeled along the same lines as its sister park, the
Terengganu economy and the state is planned to be the China-Malaysia Qinzhou Industrial Park (CMQIP) in
dynamic Tourism Gateway to the East Coast. The China. Built on a 685-hectare site, MCKIP targets high
investment and development of the new Kuala end industries from China, Malaysia and also from other
Terengganu City Centre (KTCC) will strengthen the image parts of the world. One of its largest investors is Alliance
of Kuala Terengganu as a vibrant Heritage Waterfront Steel (M) Sdn Bhd which has invested RM5.6 billion in a
City. steel mill.
INFRASTRUCTURE The beauty and diversity of natural assets in the East

Coast, which include pristine beaches, beautiful islands,
Improvements in the infrastructure such as upgrading centuries’ old forests, legend-filled biosphere reserve,
Kuala Terengganu airport to international status and the wetlands, and cool highland retreats, have made tourism
completion of the 350km East Coast Expressway will one of the important contributors to the Region’s
have a major positive impact with the areas designated economy. The islands in Terengganu and Pahang were
for investment along this route offering numerous listed as top 50 beaches of the World’s 100 Best Beaches
business opportunities. To propel the East Coast by CNN in 2013 and as the top 10 best islands for a
forward, emphasis will be on increasing labour holiday in Malaysia in 2017. The Region’s distinctive
productivity; diversifying the economic base; facilitating culture and heritage is yet another asset that has become
economies of scale; mobilising the labour force; a main attraction for tourists.
leveraging connectivity; and enhancing enabling
infrastructure such as ICT broadband connectivity.
14
SABAH
Kota Kinabalu: Transaction activity up to 3Q 2019 went up by 3.1% to 2,783 transactions and 4.6% to
RM1.786 billion respectively from the same time last year.
STABLE AND MODERATE GROWTH In the commercial property sector, the overall glut for
retail and offices still persists, especially in newer
Sabah’s economic growth for 2019 is anticipated to be developments with pick-up expected to be gradual at the
moderate, affected by slowdown in global growth, trade expense of depressed rents.
tensions between United States and China and weaker
commodity prices, amongst others. Albeit some In the housing sector, stratified high-rise developments
improvement in price towards year end, revenue continue to outnumber landed residential developments.
collection from sales tax on crude palm oil (CPO) is New developments for the latter are mainly situated in
revised downwards with the decline in CPO price for most areas further from central or prime suburban areas given
of 2019, as announced during the tabling of Sabah’s lower land cost in secondary localities. Ongoing landed
Budget 2020 in November 2019. The State Government housing developments are taking place in areas such as
is also initiating efforts to diversify to other crops and to Manggatal and Sepangar in the north and Kinarut in the
increase production of high-quality fruits and vegetables. south.
Notwithstanding the global headwinds, the State Sentiment is generally cautious in the condominium
recorded a trade surplus of RM8 billion for the first 8 sector with the softening of transaction activities and
months of 2019 whilst the tourism sector remained concerns of surplus of new units from ongoing pipeline
resilient. The construction sector was driven by activities supply. Nevertheless, developments within central
for the Pan Borneo Highway project, flyovers as well as locations offering good products with competitive pricing
development of hotels and residential properties. Loans by developers with proven track records could still pique
to finance, insurance, real estate and business sector buying interest.
activities grew by some 10.6% y-o-y to RM4.3 billion in
1H 2019, reflecting encouraging investment sentiments. There has been a noticeable rise in commercial suite
In anticipation of improved public spending, more stable developments (for short-term stay or Airbnb use)
commodity prices and sustained tourism growth, Sabah’s launched or opened for sale / registration of interest in
economy is expected to pick up with the State the past 1-2 years. The motivation for this would be two-
Government projecting a growth rate of 4.0% to 5.1% for pronged - Sabah’s growing tourism sector; and the
2020. moderated high-rise residential segment. Smaller units
translate to lower pricing for better affordability for buyers
Based on NAPIC’s Property Sales Data for 3Q 2019, and enhanced saleability for developers. However,
Sabah registered a total of 6,496 transactions increased participation from developers is likely to see
amounting to RM3.607 billion for 3Q 2019, a 5.3% and keen competition in this sector.
-2.7% y-o-y change in volume and value transacted,
respectively. The tourism sector continued its growth trajectory with a
y-o-y growth of 8.9% in visitor arrivals to 3.4 million, up
Within the same period, transaction volume and value in to October 2019. Several new major hotels were
Kota Kinabalu (including neighbouring districts of announced in 2019; namely, One Beach Resort (Club
Penampang and Putatan), rose by 3.1% and 4.6% to Med Borneo Kota Kinabalu) in Kuala Penyu district and 3
2,783 transactions and RM1.786 billion, respectively. city hotels within Kota Kinabalu CBD. Projected visitor
Transaction activities improved for all sub-sectors, save arrivals to Sabah for 2020 is 4.18 million with an
for the agriculture sector but this did not have a estimated spending of RM8.96 billion. In line with Visit
significant impact in the market as the latter only formed Malaysia Year 2020, various programmes coupled with
a very small proportion of transactions. Total transacted more aggressive promotions will be implemented. The
value for the agricultural and development land sub- Sabah International Convention Centre (SICC) is
sectors declined whilst residential, commercial and expected to be operational in 2020, providing an avenue
industrial segments reflected an increase. The residential for growth via the MICE (Meetings, Incentives,
sector forms the largest segment in Kota Kinabalu’s Conferences and Exhibition) market.
property market registering 77% of total transactions.
15
SARAWAK
The biggest public spending allocation in the history of the State’s Budget announced for 2019 at
RM11.914 billion, followed by a similar big amount of RM9.891 billion for 2020 will spur much
development growth for Sarawak over the next few years.
EBB AND FLOW On the property front, JPPH expects property market
activity in 2019 to stabilise. Judging from the increased
In 2019, the nation under a new 5-year term government volume (2018: 4.7%; 2019:7.4%) and value (2018:
grappled with inherited socio-economic issues. The year 7.4%; 2019: 22.9%) of total property transactions for the
has been filled with ups and downs likened to the ebb State, with better performances in almost all sub-sectors,
and flow of a tide, decline and regrowth. In the midst of the market for 2019 is anticipated to pick up.
this ebb and flow, hopes and disappointments abound.
The resulting market is one of mixed sentiments and The residential sector will continue to dominate the
reactions. On one hand, the market seems to be market in terms of volume and value, and expected to
bottoming out with some signs of recovery; at the same move slowly but steadily. The high rise residential sub-
time the recovery is beset by uncertainties. sector will continue to face challenges in view of the
significant increase in supply. Take-up rates of the latter
Despite a slow down in GDP growth for Sarawak to 2% in would be subject to pricing, location and other unique
2018, growth for 2019 is expected to improve to 5%-6% selling points. The industrial, agricultural and vacant
with the roll out of major infrastructure and development land sectors are expected to register slow but steady
projects especially in the aquaculture, tourism, forestry, growth whilst excess of units are still observed in the
palm oil, rubber and biotechnology sectors. commercial sector, particularly, retail units and shop
offices.
The government’s initiatives also extend to improving the
affordability of housing in the State with the introduction Overall overhang for 2019 has increased compared to
of a new housing program/scheme called Spectra 2018. High property prices, stricter lending policies,
Housing in joint ventures with local developers to deliver volatile macroeconomic conditions and weak consumer
houses of higher specifications to the people. The sentiments, remain challenging for the property sector in
government has also launched the Sarawak Digital 2019. The increase in Real Property Gains Tax (RPGT)
Economy Strategy to propel the State towards a digitised and imposition of 5% RPGT on properties sold after the
State by 2022. 5th year of purchase will dampen genuine sales.
However, decline in value is not evident.
Market confidence which was bolstered by the win of a
new government has seen a slide since 3Q 2018. The Major infrastructure projects under the 11th Malaysia
renewed confidence fizzled due to disappointments in the Plan are expected to be the catalyst for growth. The
unfulfilled manifestos of the new government. recent announcement by the State Government to
develop 2 million hectares of land for agriculture to
The increase in development expenditure will help enable the State to become a net food exporter by 2030
accelerate growth and spur the State towards achieving will mean an increase in demand for agricultural lands.
the targeted economic growth of 6% and above. The Thus, the agricultural sector is one to look out for in the
focus will be on infrastructure, rural and interior near future.
developments to ensure a more balanced and
prosperous State. MODERATION AND CONSOLIDATION
ROAD TO RECOVERY
Commodity prices are seen climbing again after a global
shortage of crude oil and seasonally higher winter 2019 was a year of moderation and consolidation on a
demand. Oil prices are likely to average RM65-RM75 per journey towards recovery. No huge market changes, up
barrel for 2019 and palm oil to exceed RM2,600 per or down, are expected with continued cautiousness in
metric tonne by year end. business dealings, going forward.
16
RESIDENTIAL
RESIDENTIAL
KLANG VALLEY
Understanding homebuyers’ appetite in consonance with product positioning and local profile is the
crux. Foreign buyers and investors may help to reduce the residential overhang following the proposed
lowering of the foreign price threshold in Budget 2020.
BUYERS’ SENTIMENT IMPROVING SUCCESS OF HOC
Loan applications recorded the highest number for the The Home Ownership Campaign (HOC) which was
past 10 years (72,100 applications) supported by the planned to scale down unsold stocks, recorded sales of
continuous efforts of the government in promoting home 28,000 units worth RM17.66 billion. Selangor and KL
ownership and financial assistance. registered the highest sales at 47% (13,160 units) of the
total nationwide with prices ranging from RM500,000 to
SECONDARY MARKET SLOWING DOWN RM750,000.
13,889 residential units worth RM7.3 million were Serviced apartments and 2 storey terraced houses formed
transacted, a decline of 3% in volume and 6% in value. the bulk sales, indicating buyers’ profiles of upgraders,
The average transacted price for condominiums young families and first-time buyers. However, the impact
decreased 5% (RM800,000 in Kuala Lumpur (KL), of HOC’s implementation towards ‘first-time genuine
RM366,000 in Selangor), whilst 2 & 3-storey terraced home-owners’ remained debatable.
increased 1% (RM1 million in KL and RM600,000 in
Selangor). HOC SALES PERFORMANCE
RM1.5 mil-RM2 mil

As at 2Q 2019, existing supply in Klang Valley stood at RM2.5 mil
2%
1.7 million residential units, up by 3% as compared to 2%
RM1 mil-RM1.5 mil
2Q 2018. SOHO and Serviced Apartments continue
12%
flooding the market, growing at 23.6% (155,618 units).
RM500,000-
RM750,000
Another 500,000 residential units may be completed in RM14.65 billion
RM750,000-RM1 mil 39%
the next 2-3 years. Unsold/overhang sentiment has
encouraged developers to not only stay vigilant on new 20%
launches, but to also adopt cost- cutting expenses.
RM300,000-RM500,000
25%
SUPPLY AND PERFORMANCE OF RESIDENTIAL IN Abbreviation: mil. = million, bil. = billion

KLANG VALLEY Note: The figures excluded units below RM300,000 and properties above RM2.5 mil
Source: KPKT-REHDA, CBRE | WTW Research
2015 2016 2017 2018 2Q 2019

1,000,000 Serviced residences priced from RM600,000 to over RM1
million constitute the highest market share, which may
partly explain the rationale of Budget 2020 to propose
800,000
lowering the price threshold for foreign buyers.
600,000
No. of Units
Socio-economic variations presented huge differences in

homebuyers’ appetite. High-end market products have
400,000
perennially been blamed for the market overhang.
However, statistical data has shown some contradictions
200,000 whereby there are also abundant units priced as low as
RM200,000 - RM300,000 in the overhang pool.
0
Landed Non-Landed Landed Non-Landed
Existing Supply Future Supply
18
RESIDENTIAL
KLANG VALLEY
CAMPAIGNING AFFORDABLITY Secondary market activity have also declined as reflected

in average transaction values in the Golden Triangle (GT)
The Government's commitment to universal home which dropped to RM957 per square foot in 1H 2019
ownership was reaffirmed by the Memorandum of compared to RM970 per square foot in 1H 2018.
Understanding (MoU) between KPKT and China’s experts Similarly, average transacted prices in Kuala Lumpur
which seeks to reshape the affordable market landscape dropped to RM794 compared to RM821 per square foot
significantly. per square foot in 1H 2018.
Bank Negara Malaysia (BNM) has initiated MyKNP, SUPPLY AND PERFORMANCE OF LUXURY
offering financial consultation services to failed MARKET
homebuyer applicants. Developers providing low entry No. o f Units in KL No. o f Projects in KL
cost and financial assistance such as HOPE by EcoWorld
and Setia FlexKey by SP Setia are aimed at mitigating the 350
barriers to owning a house. 80,000
300
60,000 250
No. of Developments
Tapping into the current slow market, Mah Sing launched
No. of Units
their range of affordably priced products i.e. M Oscar, M 200
Aruna, M Vertica and M Centura, which have shown 40,000 150
remarkable responses as to date. They also announced 100
20,000
plans for an Industrialised Building System (IBS) platform 50
in Southville City, their commitment to develop more
0 0
affordable homes.
2015 2016 2017 2018 3Q 2020f 2021f 2022f
2019
LUXURY MARKET SUBDUED
Abbreviation: KL = Kuala Lumpur
Launching activity for high-rise luxury residences in KL
was quiet in 3Q 2019, weighed down by cautious ESTIMATED SELLING PRICE OF SIGNIFICANT
sentiment. Soft launches tied up with social activities were NEW LAUNCHES
widely used to gauge market response. DEVELOP- LOCAT MIN PRICE MAX
MENT ION PRICE
Based on the number of soft launches, there will be
significant incoming supply by 2020, i.e. CORE Luxury Service Central RM2,300 RM2,400
Residence KL per sq. ft. per sq. ft.
Residence @ TRX, TRX Residences, Axon Bukit Bintang,
IBN Bukit Bintang, Lake City @KL, Agile Embassy Garden Condo-minium Bukit RM745 per RM787 per
and Alix Residence, with selling prices starting from Jalil sq. ft. sq. ft.
RM1,000 per square foot.
2 storey Shah RM520,000 RM960,000
New completions in 3Q 2019 added 3,600 units to raise Terrace Alam per unit per unit
total supply to 52,900 units (3Q 2018: 49,300 units).
2 storey Semi Rawan RM1.8 mil RM2.4 mil
Notable high end developments completed in 2019 Detached g per unit per unit
included Opus KL, Pavilion Suites (Elite), Dorsett Sri
Abbreviation: RM = Ringgit Malaysia, per sq. ft. = per square foot, mil = million
Hartamas and Residence Sefina (Mont Kiara). Source: CBRE | WTW Research
Gamuda Cove
Source: Gamuda Land
19
RESIDENTIAL
KLANG VALLEY
SEREMBAN - HEALTHY MIX

The high-rise luxury residential sector in Kuala Lumpur
The residential segment has been active both in the may also attract more interest as the KPKT plans to hype
primary and secondary markets. Reputable developers up home ownership promotions to foreign countries. The
such as Sime Darby, IJM Land and Matrix Concepts are targeted foreigner market is anticipated from China,
launching their products in townships like Nilai, Hong Kong, Singapore, Japan, Korea, and Indonesia.
Seremban 2 and Bandar Sri Sendayan. However, co-ordination between the Ministries especially
for related visa and resident permits for foreign buyers
The targeted demand includes financially better-off local may be less satisfactory.
families and even extends to the working population in
Klang Valley who are willing to travel. Units priced at Developers are also being more accommodative to
RM400,000 and below are generally deemed to be incorporate design features that facilitate short term
reasonable for this market. Overall, the persistent supply renting, such as housekeeping / concierge services, and
and sustained demand shall act as the stabiliser for the digital hardware etc. (digital lock, mobile application)
local market. CORE Residence TRX, and Lake City KL North are
observed to adopt this approach.
High-rise residential is rising up as a formidable force in
Seremban’s residential landscape, distributed across Malaysia Vision Valley 2.0 (MVV 2.0) continues to further
multiple strategic locations. expand the southern economic conurbation. Going
forward, a new southern corridor residential hotspot may
Among the hotspots are Seremban 2 (Kalista), Seremban emerge in Sepang - Bandar Enstek - Bandar Sri Sendayan
3 (UniCity) as well as Nilai (Mesa Hill, Starzvalley, and - Seremban 2 in view of the planned industrial and
Taman Bucida Hijauan) which is a prominent education logistics development in these localities. Comprehensive
hub. Apart from investors, high-rise residential properties infrastructure and transportation will enhance connectivity
in this market also target occupiers who value privacy and and could spill over into residential demand.
exclusive living.
M A R K E T O U T L OO K
New developments and potential hotspots remain driven

by reputable developers, i.e. Gamuda Cove (Smart City
Concept). Ministry of Housing and Local Government
(KPKT) has launched Malaysia Smart City Framework, to
accommodate the future emerging technology trend.
Product differentiation is something to be highlighted. For

instance, SP Setia’s launches in Cyberjaya, Bandar Salak
Tinggi, Rawang and Semenyih met with remarkable
responses. The first phase of Setia Mayuri (Semenyih) and
Setia Safiro (Cyberjaya) were fully sold upon launching,
sending signals that outskirt areas could be appealing
with the right product placement.
The opening of West Coast Expressway (WCE) will

stimulate market interest in localities such as Bandar Bukit
Raja, as manifested by the collaboration of Sime Darby
Property with Mitsui & Co Ltd and Mitsubishi Estate Co
Ltd to develop Bandar Bukit Raja Industrial Gateway.
Revising the base year for asset disposal from January

2000 to January 2013 will enable home owners to incur
lower Real Property Gains Tax (RPGT)/greater capital
CORE Residence TRX
gains. Source: CORE Precious Development Sdn Bhd
20
RESIDENTIAL
PENANG
The concern of overhang of apartments/condominiums would linger on in 2020. Price correction may
occur for apartment/condominium units in locations which have significant mismatch of supply and
demand. On the other hand, prices of landed residential units are expected to remain firm and resilient.
More affordable units are already available in the market for the mass population. The residential
sector is also anticipated to benefit from the increased interest from foreigners, particularly from Hong
Kong.
APARTMENT/CONDOMINIUM OVERHANG free kitchen and electrical appliances, etc. New incentives
WOULD LINGER ON IN 2020 include holiday packages, refer and reward schemes and
lucky draws of luxury car.
The property overhang report as at 2Q 2019 by NAPIC
revealed that the residential overhang units are still PRICE CORRECTION ANTICIPATED FOR
mainly apartments/condominiums amounting to over APARTMENT/CONDOMINIUM UNITS
2,600 units worth approximately RM2 billion. The
overhang of apartments/condominiums remain a concern In the past 2 years, a rather flattish market was also
due to the abundant apartment/condominium units being observed in the secondary sale market. The prices of
launched, constructed and completed within the past 3 to residential units was generally sustained due to the strong
5 years. Other reasons for the unsold units are high holding power of Penang property owners.
rejection rate of end financing, unreleased bumiputra
units and low demand and interest for units in secondary However, price corrections may occur for
locations. apartment/condominium units in locations which have
abundant existing and upcoming units, reflecting a
In terms of unsold residential units, 35% of the 1,360 significant mismatch of supply and demand.
overhang units are in the price range of RM500,001 to
RM1 million per unit. Units priced RM1 million and more PRICES OF LANDED RESIDENTIAL UNITS TO
formed the bulk (60%) of the total overhang valued at REMAIN FIRM AND RESILIENT
slightly over RM1.9 billion.
Landed residential units remain the preferred residential
Developers of residential projects particularly apartment/ accommodation for Penangites. As such, prices of landed
condominium schemes are experiencing increased residential units were generally firm in 2019 and is
pressure in securing sales. Various incentives continue to expected to remain resilient in the near future due to the
be offered to prospective purchasers by developers in the limited supply compared to high rise units, particularly in
short term - rebates on selling prices, waiver of legal fee, Penang Island.
VOLUME OF UNSOLD UNITS BY TYPE VALUE OF UNSOLD UNITS BY TYPE

Terraced 5%
(200 units) Semi-Detached 10% (397
units) Terraced 5% Semi-Detached 13%
(RM153.95 mil) (RM433.38 mil)
Detached 6%
(227 units)
Townhouse +
Cluster 2% Detached 17%
3,929 units RM3,262.17 mil
(92 units) (RM547.42 mil)
Low-cost, 10%
Condominium / Condominium / Townhouse + Cluster
(392 units)
Apartment 67% Apartment 61% 3% (RM99.26 mil)
(2,621 units) (RM2,004.38 mil) Low-cost 1% (RM23.78
mil)
Abbreviation: mil. = million

Source: NAPIC, CBRE | WTW Research Source: NAPIC, CBRE | WTW Research
21
RESIDENTIAL
PENANG
VOLUME OF UNSOLD UNITS BY PRICE RANGE VALUE OF UNSOLD UNITS BY

PRICE RANGE
Less than RM100,000 Less than RM100,000 RM100,001-RM300,000
10% (413 units) 1% (RM25.31 mil) 2% (RM50.98 mil)
More than
RM1,000,000 24% RM100,001 - RM300,001-RM500,000
(924 units) RM300,000 7% 12% (RM393.01 mil)
(290 units)
3,929 units RM3,262.17mil

RM300,001 - RM500,001-
RM500,000 RM1,000,000
RM500,001 - 24% 26% (RM865.96 mil)
RM1,000,000 35% (942 units) More than RM1,000,000
(1,360 units) 59% (RM1,926.91 mil)
Abbreviation: mil. = million
MORE AFFORDABLE UNITS TO BE PROPOSED ALOR SETAR – STATUS QUO

BY DEVELOPERS
1,466 units of residential units were transacted during
Certain developers have also shifted their focus to 1Q-3Q 2019 – 5.2% higher than same period last year.
developing affordable units. Developers having sizeable On average, the price for terraced houses remained
parcels of development land are expected to rationalize unchanged from previous year.
their proposed developments to comprise more content
of affordable units to serve the needs of the mass market. Demand is expected to concentrate in the town centre,
Moreover, there are development incentives for those mainly from first-time homebuyers. Nonetheless, limited
who develop solely affordable units for sale. land availability may affect price affordability. Taman Seri
Belida located along Jalan Suka Menanti (approximately
GOVERNMENT INCENTIVES AND INITIATIVES 3km away from Alor Setar town centre) is setting a new
EXPECTED TO CONTINUE benchmark price of RM899,000 for 2-storey semi-
detached houses with roof garden. The development is
To address the property overhang situation, the considered as a high-end product in the local market with
Government launched the National Home Ownership modern architecture.
Campaign 2019 (HOC 2019), offering a base 10%
discount on the selling price, stamp duty exemption on The high-rise residential segment in Alor Setar is still a
sale and purchase agreement (SPA) for properties priced niche market with limited supply and narrow demand
up to RM1 million and stamp duty exemption for loan coming from residents looking for access to facilities.
agreements up to RM2.5 million. Other initiatives include
My First Home Scheme and First Time Home Buyer IPOH – BUYERS’ MARKET
Malaysia, which are anticipated to continue in the near
future. Landed residential will spearhead Ipoh’s residential
market in 2020 and remain a buyers’ market in view of
INCREASED INTEREST FROM FOREIGNERS the abundant supply, with demand primarily from
occupiers rather than investors. Among those worth
The prevailing chaos in Hong Kong have prompted Hong noting are the freehold double-storey terraced in Bandar
Kong residents to consider relocating to other Asian Seri Botani offered below RM500,000 and landed
countries, including Malaysia. The residential sector in the PR1MA projects around Kamunting and Kampar.
main cities of Malaysia, particularly Penang, may benefit
from the increased interest from this segment of
foreigners.
22
RESIDENTIAL
ISKANDAR MALAYSIA
Landed residential market remained stable in pricing and number of transactions. For high-rise
residential, developers are facing hardships in clearing their existing stock due to the oversupply
condition in the market.
UPWARD TREND IN TRANSACTION ACTIVITY SUPPLY OF LANDED RESIDENTIAL SECTOR

Cumulative Supply Annual Supply
Transaction activity of both landed and high-rise 350,000 10,000
residential markets picked up in the first nine months of
2019 as compared to the corresponding period in 2018. 300,000
Transaction volume of landed residential increased 22% 8,000
250,000
Cumulative Supply (No. of Units)

from 6,883 units in 1Q-3Q 2018 to 8,396 units in 1Q-
Annual Supply (No. of Units)

3Q 2019 while transaction value rose from RM3,137 200,000 6,000
million in 1Q-3Q 2018 to RM3,971 million in 1Q-3Q
2019, a growth of 27%. 150,000 4,000
100,000
For high-rise residential, the volume of transactions in 2,000
1Q-3Q 2019 was 1,930 units, an increment of 28% 50,000
from 1,505 units in the corresponding period of 2018.
0 0
While the value of transactions grew by 20% to RM710
2015 2016 2017 2018 2019e
million in 1Q-3Q 2019 from RM594 million in 1Q-3Q
2018. Source: NAPIC, CBRE | WTW Research
SUPPLY FOR LANDED HOUSES GREW SUPPLY OF HIGH RISE RESIDENTIAL SECTOR
STEADILY Cumulative Supply Annual Supply
The existing stock of landed houses increased steadily 150,000 20,000

over the past 5 years with a total number of completed
Cumulative Supply (No. of Units)
units ranged from 3,000 to 6,000 units per annum.

15,000
Approximately 5,500 units of landed houses are expected 100,000
in 2019, bringing cumulative supply to 323,000 units.
10,000
OVERSUPPLY OF HIGH-RISE: A NEVER 50,000
ENDING ISSUE 5,000
The supply of high-rise units rose tremendously between 0 0

2015 and 2019. The cumulative supply is estimated at 2015 2016 2017 2018 2019e
133,000 units in 2019, as compared to 38,000 units in
2015. The huge afflux of high-rise units is mainly caused
by the successive entry of serviced apartment units that
launched since 2012/2013.
PROPERTY OVERHANG IN ISKANDAR MALAYSIA
The severe oversupply condition of high-rise units in Landed Residential High-Rise Residential
Iskandar Malaysia (IM) is mainly contributed by the
20,000
overbuilt of this products as well as the mismatches in
price, location and products. The number of unsold
completed high-rise residential units grew dramatically 15,000
over the past 5 years. The unsold units ramped up about
No. of Units
twentyfold from 800 units in 2015 to 15,800 units in 2Q 10,000

2019.
5,000
Whilst the property overhang condition in landed
residential sector is manageable with the number of 0
unsold completed units ranged from 500 to 2,000 units 2015 2016 2017 2018 2Q 2019
per annum in between year 2015 and 2Q 2019.
23
RESIDENTIAL
ISKANDAR MALAYSIA
FOREIGN OWNER THRESHOLD LOWERED DEVELOPERS RETURNING TO HIGH-RISE

RESIDENTIAL MARKET WITH MORE REALISTIC
Following Budget 2020, the Johor State Government PRICING
announced paring down the foreign ownership threshold
price from RM1 million to RM600,000 in the first nine Less landed residential projects were launched in 2019,
months of 2020, to facilitate unwinding the severe i.e. 22 projects with a total number of approximately
overhang in high-rise residential market. A total of 5,000 units as compared to 36 projects with
11,211 (71%) overhang high-rise units in Iskandar approximately 6,500 units launched in 2018. The selling
Malaysia (IM) may be made eligible to foreigners prices for terraced houses are generally in the range of
especially Singaporeans. RM230 to RM480 per square foot while the selling prices
for cluster houses are from RM400 per square foot
Compared to Singapore, one of the most expensive onwards.
countries to purchase a house in the world, property
prices in IM are relatively cheap for Singaporeans with Developers were launching more high-rise projects in
the power of 1:3 ratio in currency exchange. 2019 - 10 projects as compared to 4 projects in 2018.
Singaporeans can enjoy living in a luxury apartment in These newly-launched 6,600 units will enter the market in
Iskandar Malaysia for S$350,000, which is equivalent to 3 to 4 years. The selling prices are varied based on
a HDB flat in Singapore using the same amount of location and unit size. In Johor Bahru city centre/ fringe,
money. With this move, the overhang of high-rise newly launched projects are priced between RM750 and
residential in IM might be eased. If the Rapid Transit RM1,000 per square foot. For projects which are located
System proceeds successfully and Singapore’s economy is within popular and matured housing schemes/township
revived in 2020, the sales rate for unsold completed units developments, selling prices ranged from RM550 to
might improve. RM750 per square foot while for projects located further
away from city or at less popular addresses the selling
SUB-SALE MARKET SOFTENED prices generally range from RM350 to RM450 per square
foot. To boost sales, some developers have offered
The sub-sale market for landed residential softened with promotion packages such as rebates up to 20%, legal
roughly 40% to 70% drop in transaction volume. fees and stamp duties waived for loan agreement and
Nevertheless, in terms of sub-sale price performance, transfer of property, etc.
average prices were generally stable with terraced, cluster
and semi-detached houses recorded at about RM350,
RM410 and RM500 per square foot respectively.
On the other hand, high-rise residences in the sub-sale

market dropped about 10% in terms of number of OVERHANG UNIT PRICED RM600,000 AND
transactions while the average price increased by 15% to ABOVE IN ISKANDAR MALAYSIA
RM425 per square foot. The slowdown in the sub-sale
market is likely due to the Home Ownership Campaign
offer for purchases from developers (i.e. primary market):
a minimum 10% price discount and stamp duties Less than
RM600,000 29%
exemption on loan agreement and Memorandum of
4,613 units
Transfer (MOT), attracting more house buyers to opt to
purchase from primary market. Overhang by Price
Segment
The 5% of Real Property Gains Tax (RPGT) charged on as of 2Q 2019
property disposal for more than 5 years of ownership
which announced in Budget 2019, has also deterred
house owners selling off their property in 2019. However, More than
the sub-sale market might regain its momentum due to RM600,000 71%,
the government revision in Budget 2020 where the base 11,211 units
year has been revised to 1st January 2013 from January
2000, which may reduce the chargeable tax on
properties purchased before 2013. Source: CBRE | WTW Research
24
RESIDENTIAL
ISKANDAR MALAYSIA
BATU PAHAT – SLOW BUT STEADY No new launches of high-rise residential were observed
in Melaka since 4Q 2018. This is on hindsight due to the
Batu Pahat’s landed residential segment is not foreseen gush of supply of serviced apartments around the town
to vary in 2020. Lack of new sizeable residential centre, by and large purchased by investors for short-term
developments will cushion the dampening demand accommodation rental. The resulting effect is competitive
arising caused by price mismatch. High land and pricing among newer launches and the high-rise
development costs have been cited as the main residential segment is in absorption mode. Overall,
impediments for developers to price-match potential slowdown in supply shall recalibrate the market and
buyers who are predominantly occupiers in this market. mitigate the risks of serious oversupply.
Meanwhile, Batu Pahat’s high-rise residential segment
has been silent, no new launches anticipated in near OUTLOOK
future.
From a regional perspective, the landed residential
MELAKA – UP AND RUNNING segment in this part of Malaysia would remain status quo
in 2020. Meanwhile, the high-rise residential segment is
Melaka’s landed residential segment is expected to be portraying different states of ‘absorption’ and ‘stagnation’
upbeat and continue to dominate the residential sector. for Melaka and Batu Pahat respectively.
On the supply side, developers still proceed with new
projects, tapping onto the opportunities in undeveloped While the landed residential markets would not deviate
areas with proximity to schools and workplaces. On the from the domination by owner occupiers, investment
demand side, prices of landed properties in Melaka can could still proliferate in the high-rise residential markets of
still be regarded as affordable. All in all, good sales and Melaka especially.
price increment could still be forthcoming in the landed
residential market in 2020 and beyond.
25
RESIDENTIAL
EAST COAST
A positive turn ahead.
KUANTAN – PLEASANTLY MILD minimum value for 2- to 3-storey terraced, 2- to 3-storey

semi-detached and detached properties. Vacant
Kuantan’s residential market has more or less bottomed residential plots are also among the popular transactions
out since end of 2018. Although the low pricing trend in Kota Bharu, generally valued between RM50,000 and
prevailed, 2019 has seen a better performance in terms RM100,000 per unit.
of take-up rate and transaction activity. Developers are
seen to be more cautious with new launches, the priority The high-rise residential segment has been slowly making
is on sales for unsold existing stock. Developers who are its way into Kota Bharu’s residential market and it is
innovative with their design concepts, willing to take a anticipated to remain on moderate trajectory for some
lower profit margin as compared to the previous 3 years time. There has been constant new supply but cautious
and at locations with good basic infrastructures and optimism is holding back on take-up rates due to tenancy
amenities could still be able to keep their head above inactivity. Transaction data suggests that the current
water. market does not expect high-rise residential properties to
surpass RM500,000 per unit.
There were a few bright spots on both ends of the market
spectrum - the affordable and the luxury segment. KUALA TERENGGANU – QUIET RESILIENT
Developers who are willing to stretch themselves by
providing the extras may be rewarded. A case in point Residential is likely to remain the same in 2020. A
would be the KotaSAS Summer West and Summer East potential boost of supply and demand in Kuala Nerus
whereby its terraced houses are enhanced with the may emerge from the completion of the interim bridge to
features of a semi-detached unit such as wider frontage Kuala Terengganu. In Kuala Terengganu, the majority of
and car porch. Its single-storey terraced units are selling landed residential properties were transacted below
at RM350,000 - which is above the conventional price RM400,000 per unit. 2-storey semi-detached houses
for such property type in Kuantan - the reception was priced between RM400,000 and RM500,000 per unit
commendable with willing buyers making up of first-time recorded the highest transaction volume.
homebuyers and upgraders.
The high-rise residential segment is relatively quiet in
For Kuantan’s high-rise residential segment, prices in the Kuala Terengganu. New supply is coming in at a
primary and secondary markets are still regarded as moderate pace whereby Kuala Terengganu would still
attractive. There is still ample land in Kuantan which welcome new high-rise residential in 2020 and the
favours landed residential development hence, supply of demand trend is likely to stay resilient.
high-rise residential shall remain modest which in turn,
holds down prices for existing properties. From demand’s
viewpoint, persistent tenants promises reasonably good
rental returns and lure investors.
KOTA BHARU – SMOOTH SAILING
In Kota Bharu, the residential market demand is expected

to prevail heading into 2020 hence, steady price and
take-up rates of residential properties. Demand for
landed residential property remains significant,
particularly in strategic locations such as Bandar Baru
Kubang Kerian, Panji and Bandar Baru Gua. Likewise,
Sering and Wakaf Delima which are vibrant since they
are on freehold land. Pricewise, RM400,000 is the typical
26
RESIDENTIAL
SABAH
Kota Kinabalu: Slight increase in transaction activities mainly spurred by the landed residential sector.
High-rise residential to remain competitive due to concerns of rising supply and saturation.
SLIGHTLY MORE ACTIVE SUB-SALES Taman Bukit Sepangar (115 units) and Bukit Damaisari
Manggatal Phases 3 and 4 (104 units). These 2-storey
Sub-sale transactions for the residential sector terraced house developments are located in Kota
encompassing vacant residential plots, landed and Kinabalu’s northern sector in Sepangar and Manggatal.
stratified housing within Kota Kinabalu-Penampang- There are also other terraced house developments taking
Putatan for the period of January-September 2019 shape in the southern sector in Kinarut.
increased by a marginal 2.8% and 0.8% in terms of
volume and value transacted, y-o-y. Of this, landed 2019 saw the completion of Casablanca Residence, a 94
residential developments make up about half of the units gated and guarded 2- to 3- storey terraced house
transaction volume. The landed residential sector was development located off Jalan Kolombong.
more active in 2019, with a y-o-y increase of 17.4% and
14.6% in transaction volume and value, respectively. Within the high-rise sector, 1,534 condominium units
from 4 developments were completed: namely The
LIMITED NEW LAUNCHES Gardens (500 units), Maya @ Likas (483 units),
Kingfisher Inanam Block A (255 units) and Bukit Bantayan
The more active sub-sales for landed residential could be Block E (296 units), which reflects an increase of about
partly attributed to the limited new launches in 2019. 15% from 2018.
Significant developments launched include Parklane @
RESIDENTIAL TRANSACTIONS – KOTA LANDED RESIDENTIAL TRANSACTIONS – KOTA

KINABALU, PENAMPANG & PUTATAN KINABALU, PENAMPANG & PUTATAN
COMPARISON TOTAL TOTAL COMPARISON TOTAL TOTAL

PEROD VOLUME VALUE PEROD VOLUME VALUE
Jan – Sep 2018 2,087 RM940.41 mil

Jan – Sep 2018 903 RM472.87 mil
Jan – Sep 2019 2,145 RM948.09 mil
Jan – Sep 2019 1,060 RM541.97 mil
% Change y-o-y 2.8% 0.8%
% Change y-o-y 17.4% 14.6%
Abbreviation: RM = Ringgit Malaysia, mil. = million Abbreviation: RM = Ringgit Malaysia, mil. = million
Source: NAPIC Source: NAPIC
SUPPLY OF LANDED RESIDENTIAL IN KOTA SUPPLY OF HIGH-RISE RESIDENTIAL IN KOTA

KINABALU - PENAMPANG KINABALU-PENAMPANG
Cumulative Supply
Terraced Semi- D Annual Supply
Detached Annual Supply
40,000 1,000 14,000 1,800
12,000 1,600
No. of Units
800
30,000 1,400
10,000
1,200
600
No. of Units
8,000 1,000
20,000 800
400 6,000
600
4,000
10,000 400
200 2,000 200
0 0 0 0
2015 2016 2017 2018 2019e 2015 2016 2017 2018 2019e
Source: NAPIC, WTWS Research Abbreviation: per sq. ft. = per square foot
Source: NAPIC, WTWS Research
27
RESIDENTIAL
SABAH
3 new condominiums totalling 1,322 units were Demand for high-rise residential in Tawau is targeted at
launched, namely Jesselton Twin Towers, a 56-storey higher income buyers or investors.
condominium tower located in Damai (819 units), Forest
Hill Residences (396 units) and the final phase of LABUAN
Kingfisher Inanam (239 units).
Demand for landed residential properties in Labuan is
In the sub-sale market, JPPH transaction data for mainly driven by mid and upper income segment who
January-September 2019 showed a y-o-y decline in purchase residential properties for their own stay.
volume and value transacted for condominiums. Out of Overall, the outlook for the residential sector is less
the total transactions, developments priced between optimistic given its limited population size.
RM400,000-RM600,000 per unit accounted for about
half of transaction activities with those priced over RM1 Affordable high-rise residential development in Labuan is
million accounting for about 17% of transaction volume. sought after by the low and low-middle income groups,
such as Ganggarak Permai apartments which was initially
Moving forward, values for well-located and well- launched at RM150,000.00. The development has been
managed developments should be sustainable although fully sold with secondary transactions in the range of
the rental market remains competitive as supply outpaces RM180,000 – RM230,000 per unit.
demand. The number of new condominium launches
could moderate in the near future due to concerns of SANDAKAN
rising supply and saturation. Some developers are also
shifting to commercial suite developments to capitalise on In Sandakan, ongoing high-rise residential projects
Sabah’s tourism growth and increasing popularity of launched in 2017 and 2018 comprise about 444
alternative accommodation such as Airbnb. condominium units and 360 medium-cost apartments
with 192 condominium units launched in October 2019.
KENINGAU
OUTLOOK
The landed residential market for Keningau remained
firm with sustained prices. Selective demand could still The residential market in smaller towns was rather
emerge amidst softer purchasing appetite. lackluster due to soft economic conditions caused by the
slowdown in the palm oil industry. Any prevailing demand
LAHAD DATU in these markets are niche or selective. Optimism in the
residential market is premised on recovery in the general
2019 was a challenging year for Lahad Datu. The economy.
residential sector was sluggish, affected by the weak palm
oil sector experiencing continued low production and
average selling prices hitting a nadir in 3 years. Supply
within the low and medium-cost housing segment is
lacking whilst higher-end housing market is affected by
weak purchasing sentiments.
Moving forward, Lahad Datu’s residential market is

anticipated to experience passive demand with the
younger population generally opting to stay with their
family due to affordability factor and the lack of housing
supply in the RM200,000-RM300,000 price range.
TAWAU
Likewise, the performance of Tawau’s residential market

is dependent on the recovery in the palm oil industry.
Developers are offering discounts of up to 20% in an
effort to boost buying sentiment. The general perception
is that the local economy may see initial recovery in 2020
or later. Maya @ Likas
Source: WTWY Research
28
RESIDENTIAL
SARAWAK
KUCHING: Landed housing continues to see demand and are launched mostly in secondary prime
areas. New supply of high rise strata titled residential units continues to outstrip landed housing. The
number of launches for high-rise residential units are modest for 2019 in view of the oversupply.
STEADY SUPPLY AND DEMAND FOR LANDED Sale prices for apartments have stagnated around
RM500 per square foot in prime locations, with recent
There were more landed residential launches for 2019 new launches priced within the RM400 to RM500 per
compared to 2018, most being located in secondary square foot price range. Most projects are offering
areas. Lee Onn Development Sdn Bhd offered 106 smaller units below 1,000 square feet in order to
terraced and semi-detached units for its Moyanese maintain affordability.
project at Jalan Matang-Batu Kawa. Other new launches
include Taman Mutiara Damai at Petra Jaya with 90 units Rentals are very much negotiable in the current soft
of single storey and 2-storey terraced houses, Boxhill 76 market and this has pulled down the average asking
@ 7th Mile with 76 units of 2-storey terraced houses and rental for apartment units, thus affecting net yields.
Taman Riveria Maya at Samariang with 60 single storey
semi-detached and detached housing units. Landed Stratified residential units are experiencing a supply glut
housing projects are seen sprouting up along the of late and this has resulted in a buyers’ market with
Kuching-Serian route. buyers dictating the rentals and rates. Units are taking
longer time to sell or rent, especially those in the higher
The market for landed residential units remains steady rent market/class.
and prices continue to increase marginally. Rentals and
occupancies remain stable. GOOD DEALS IN A BUYERS’ MARKET
SUPPLY GLUT OF HIGH RISE RESIDENTAL The current period, being a buyers’ market, is a good
time to hunt for good deals, be it in landed or high rise.
High-rise residential units continue to flood the market Demand is expected to strengthen further once the
with about 1,520 units completed in 2019, about 10% market recovers.
more than 2018. SOHO units in Kuching make up one-
quarter of completions.
Completed high rise could reach around 3,000 units

taking into account the number of units launched for
2019 of about 1,740 units, more or less on par with the
numbers launched in 2018, including PRiMA units.
HK Square at Jalan Sg Maong Utama The Fifth Ryegates at Jalan Airport

Source: WTWY Research Source: WTWY Research
29
RESIDENTIAL
SARAWAK
Recent high rise residential units are mostly developed as Residences at Trinity Hub with 48 SOHO and 32 Condo
part of a mixed development or purely serviced units, Cube 2 (94 units) and Zen 66 (66 units) both at
apartments, as there is no restriction on the number of Jalan Dogan in the Batu Kawa area and the Fifth
units unlike residential developments’ planning criteria Ryegates (72 units) at Jalan Airport.
which limits the number of units to 30 per acre.
MIRI
For 2019, the Kuching built-up area which covers the
Kuching urban area and its surroundings recorded the The residential market in Miri was hindered by weak
highest number of launches at 1,165 units with only 1 purchasing confidence due to stringent end-financing
other launch each in Batu Kawa (128 units) and Matang amidst an overhang situation. Zooming into preference
(448 units) area. Of these, the biggest contributors were by property type, landed residential edges ahead of the
The Avona Residences @ the Northbank (298 units) high-rise residential.
developed by M/s Ibraco, Doncaster Residence @ Hup
Kee (216 units) developed by M/s Lee Onn and the BINTULU
second block of Mackenzie Avenue which added another
128 units and second tower of Sapphire on the Park with Bintulu’s landed residential exhibited resilience in 2019,
166 units. The units launched ranged between 490 with slight increments in transaction volume and selling
square feet (studio) and 3,390 square feet (penthouse). prices of newly launched residential properties. Being an
industrial town, work migrants from other parts of
HK Square was the largest serviced apartment Sarawak or even Malaysia represent a significant source
development completed for 2019 comprising 2 towers of homebuyers. In addition, Bintulu has 43% of the
housing 304 units followed by the first 184 units population in the house-buying group between 25 and
completed for Liberty Grove which when fully completed 54 years old.
would be among the largest apartment projects in
Kuching; and Tower B of Rivervale Condominium with
184 units of the total 368 units of the project when
completed.
Other projects completed for 2019 include 300 units at

LD Lagenda next to the Sarawak General Hospital,
Stutong Tiara 1 (108 units) at Stutong Baru, Trinity
SUPPLY AND PRICE OF HIGH-RISE RESIDENTIAL

IN KUCHING
Cumulative Supply
Average Yield (%)
25,000 4.1
4.0
20,000
4.0
No. of Units
RM per sq. ft.
15,000 3.9
10,000 3.9
3.8
5,000
3.8
0 3.7
2015 2016 2017 2018 2019e 2020f
Note: Data for the full year of 2019 is based on estimation from NAPIC’s data Trinity Residence @ Trinity Hub
Abbreviation: per sq. ft. = per square foot Source: WTWY Research
Source: NAPIC, WTWY Research
30
RESIDENTIAL
SARAWAK
Underpinned by consistent demand in the landed SIBU

residential segment, developers are constructing more
terraced houses - 631 units of incoming supply and 363 Sibu’s landed residential market is balanced with
units of planned supply as at 1Q 2019. Single-storey sufficient supply and reasonable demand. Although
terraced houses in Bintulu is well sought after as their selling prices have been increasing due to dwindling
prices are lower compared to other types of houses. supply in the prime areas nearer to Sibu downtown, the
Locations close to workplace and industrial areas such as landed residential market shall remain stable in 2020.
Kidurong are more preferred.
In spite of the slower take-up rate compared to previous
As at 2Q 2019, there will be 411 units incoming supply years, there were still new launches of serviced
of condominium/apartments. The selling price of such apartments in Sibu in 2019. Market preference points
property type may stay unchanged so as to maintain take- towards those tagged below RM450,000 per unit.
up in 2020. The preference towards high-rise residential
is mainly dictated by the facilities provided as well as Landed residential property would be favoured beyond
pricing which is deemed as attractive and competitive if that threshold. The high-rise residential market for Sibu in
not exceeding RM350,000 per unit. 2020 is projected to be flattish.
The residential market demand in Bintulu could be OUTLOOK

rejuvenated in view of the construction of a bridge across
Kemena River which would shorten the distance between The residential sector remains the most active and biggest
Jepak and the town centre. The other highlights are the contributor to the Sarawak property market. Landed
opening of Spring Megamall and the under-construction residential sector remains stable and continues to see
Boulevard Mixed Development. Both are considered demand but is being outstripped by high rise residential
mega projects in Bintulu and share equal prospects of units especially in Kuching. The overall market is facing a
becoming Bintulu’s new landmarks given the proven supply glut in the high rise residential sector.
success of the sister projects in Kuching.
Rivervale Condominium and Housing Estate @ Stutong

31
RESIDENTIAL
NEW LAUNCHES (LANDED RESIDENTIAL)
UNIT SIZE PRICE

PROJECTS LOCATION DEVELOPER TYPE
(SQ. FT.) (RM PER UNIT)
KLANG VALLEY
Reesia @ Elmina Gardens Sungai Buloh Sime Darby Property 2-SD 3,243 - 4,249 >1,800,000
Elmina Valley 5 @ City of Elmina Shah Alam Sime Darby Property 2-T 2,330 – 2,809 >906,000
Artoca @ Setia Alam Shah Alam SP Setia 2-T TBC >520,000
Alamanda @ Parklands Rawang Amalan Setar 2-T 1,022 >419,000
Dalia @ Tropicana Aman Kota Kemuning Tropicana Aman 2-SD 3,808 >1,800,000
Clarino @ Alam Impian Kota Kemuning I & P Group 2-T 2,322 >650,000
Teluk Panglima
Palma Sands @ Gamuda Cove Gamuda Land 2-SL 1,824 - 2,620 >680,000
Garang
Jovita @ Gamuda Garden Rawang Gamuda Land 2-SD 2,566 - 3,222 >1.8 mil
PENANG
Garden Villas @ Jesselton Hills Alma DNP Land 2-SD 2,485 >953,000
Ambay Park @ Pearl City Simpang Ampat Tambun Indah Land 2-T 2,000 – 2,100 >428,000
Amansara South @ Setia 1-T 1,310 - 1,812 >330,000

Bertam SP Setia
Fontaines 2-T 1,835 >420,000
1-T 1,395 448,400 – 620,100

2-T 1,867 558,000 – 693,800
NusaCinta @ Setia Fontaines Bertam SP Setia
1-D 2,317 813,500 – 1,327,400
1-D 3,257 1,252,900 – 1,771,900
JOHOR BAHRU
Venice @ Bandar Putra Kulai IOI Group 2-T 2,440 >660,000
Orchid @ Meridin East 1,782 >540,000

Pasir Gudang Mah Sing Group 2-T
The Hazel @ Meridin East 1,964 >580,000
Breezegate @ Eco Tropics Pasir Gudang Eco World Group 2-T 1,636 – 2,121 >580,000
Aspira Park Homes Iskandar Puteri UEM Surise 2-T 1,931 >600,000
Rose @ Eco Spring Tebrau Eco World Group 2-T 1,924 – 2,237 >920,000
Austin Senibong
Crest @ Austin Tebrau 2-T 1,689 – 1,966 >550,000
Development Sdn Bhd
Adenia @ Sapphire Hills Pulai Keck Seng Berhad 2-T 1,833 >430,000
Amber Hills @ Bandar Baru

Pulai Keck Seng Berhad 1-C 1,358 – 2,059 >400,000
Kangkar Pulai
2-T 1,654 - 1,862 >610,000
Austin Duta Tebrau IJM Land Berhad
2-C 1,790 - 1,950 >770,000
Abbreviation: C = Cluster, D = Detached, LCP = Low Cost Plus, T = Terraced, TH = Townhouse, SD = Semi-Detached, SL = Super-Linked,
RM = Ringgit Malaysia, Per sq. ft. = per square foot, mil = million
Source: Respective Developers, Price subject to other sales package from developers
32
RESIDENTIAL
NEW LAUNCHES (LANDED RESIDENTIAL)
UNIT SIZE PRICE

PROJECTS LOCATION DEVELOPER TYPE
(SQ. FT.) (RM PER UNIT)
KUANTAN
Summer West & Summer East KotaSAS KotaSAS SB 1-T 1,680 350,000
KOTA KINABALU
Parklane @ Taman Bukit WMG Holdings

Sepangar 2-T 1,876 - 1,929 600,000 – 750,000
Sepangar Barhad
Bukit Damaisari Ph 3 & 4 Manggatal SCP Group 2-T 1,661 - 1,758 651,200 - 985,000
SANDAKAN
Panorama Jelita
Rimbayu Indah Ph 1A Off Jalan Utara 2-T 1,339 - 1,498 526,000 - 819,000
SB
KUCHING
1-T 1,085 345,000 - 426,000

Jalan Matang Lee Onn Development
Moyanese 2-T 1,990 449,000 - 505,000
Batu Kawa SB
2-SD 2,086 560,000 - 630,000
1-T 833 150,000 - 425,000

Off Jalan Stakan
Lots 168&169/Blk24/MTLD N/A 1-T 974 150,000 - 415,000
Melayu
1-SD 1,244 415,000
Jalan Sultan 1-T 975 - 1,029 290,000 - 572,000

Mutiara Damai Orion Master SB
Tengah 2-T 1,884 - 1,995 430,000 - 770,000
Off Jalan Tecktonic & Sons
Boxhill 76 @ 7th Mile 2-T 1,791 >610,000
Penrissen Holdings SB
Kuching-
Precinct Grande Phase 1 @ La Hock Seng Lee 4,442 / 4,729 3,150,000 / 3,380,000
Samarahan 2-D
Promenade Construction SB / 5,064 / 3,580,000
Expressway
Off Jalan
Nursinar Development
Taman Zoriah 2 @ Matang Jaya Matang / Jalan 2-T 1,433 429,000 - 598,000
SB
Depo
Jalan Matang - 2-T 1,789 465,800 - 590,800

Taman Moyan Indah Phase 2 GKS Development SB
Batu Kawa 2-SD 2,179 697,800
Lot 6134 @ Semerah Padi Jalan Semariang Orion Master SB 2-T 1,680; 1,838 485,000 - 607,000
Off Jalan Tun

Estate 28 OBYU Realty 2-T N/A 700,000
Abdul Rahman
Laman Menggris Jalan Menggris OBYU Realty 2-T N/A 580,000 - 800,000
1-T 764 / 926 298,888 - 482,888

Jalan Bako Borneo Development
Dusun Bayu Phase 8 1-T 786 / 947 333,888 - 488,888
Demak Laut Corporation (S) SB
1-T 829 / 1,000 349,888 - 504,888
Jalan Lingkaran 1-D 1,121 N/A

Riveria Maya Petra Jaya Properties
Samariang 1-SD 1,127 484,000 - 524,000
33
RESIDENTIAL
NEW LAUNCHES (HIGH-RISE RESIDENTIAL)
UNIT SIZE NO. OF PRICE

PROJECTS LOCATION DEVELOPER
(SQ. FT.) UNITS (RM PSF)
KLANG VALLEY
TRION @KL Kuala Lumpur Binastra Land 650 - 1,000 1,344 <846
Cubic Botanical @ South

Kuala Lumpur Agile Tropicana Developer 518 - 900 582 >640
Bangsar
PENANG
Muze @ PICC Bayan Lepas Hunza Group 1,087 - 5,264 846 >750
Terraces Condominium Bukit Jambul IJM Land 925 - 950 410 >570
Aston Acacia Bukit Mertajam Hua Yang Berhad 700 - 1,200 646 >350
1,342
Havana Beach Residences Bayan Lepas Ideal Property Group 850 350
(affordable)
JOHOR BAHRU
Twin Tower Residence @ Bukit

JB city centre SKS Group 559 - 1,217 458 735 - 870
Chagar
Taman
Space Residency Abad/Taman Linbaq Holding 645 - 907 614 >1,000
Century
Sky Estadia Setia Tropika SP Setia Group 646 - 1,066 346 550 - 600
Taman Bukit
Sky Trees Residence SP Setia Group 581 - 1,001 484 575 - 640
Indah
Paradigm Residence Skudai WCT Holding 530 - 1,123 263 600 - 750
Kampung
One 49 Residence Melayu Teguh Harian SB 875 - 1,211 1,388 340 - 435
Majidee
Taman Seri
Camellia Residence UMLand Berhad 657 - 950 300 370 - 430
Austin
Kangkar
KSL Residence 2 KSL Holdings Berhad 463 – 883 1,276 >433
Tebrau
KOTA KINABALU
Hap Seng Properties

Kingfisher Inanam (Block C) Inanam 865 - 1,160 239 573 - 638
Development SB
Jesselton Twin Towers Damai Jesselton Properties SB 649 - 6,982 819 688 - 1,366
Forest Hill (Block A & B) Bundusan Peak Sunrise SB 838 – 1,155 396 600 - 645
SANDAKAN
Kingfisher Sandakan (Block A2, Off Jalan Hap Seng Properties 751.86 -
192 372 - 488*
Astana Heights Ph 5C) Utara Development SB 1,229.56
34
RESIDENTIAL
NEW LAUNCHES (HIGH-RISE RESIDENTIAL)
UNIT SIZE NO. OF PRICE

PROJECTS LOCATION DEVELOPER
(SQ. FT.) UNITS (RM PSF)
KUCHING
Jalan Batu Tenaga Stabil SB/Active 1,169 - 1,286/

P' Residence (Block 7 and 8) 168 357 - 395
Kawa Pioneer SB 2,523 & 2,533
Off Jalan Sin Hai Ming Development 861 - 1,214/
GEM Suites 198 From 463
Stutong Baru SB 1,624
Off Jln Sg
Liberty Grove @ Kota Sentosa Elica SB 1,065 - 1,400 96 400 - 500
Tapang
Jalan Stapok
Mackenzie Avenue Block A Lee Onn Construction Co. 1,520 128 300 - 350
Utara
Stutong Tiarra 2 (Stutong 7 Off Jalan
Jyrah Realty SB 672 - 1,222 130 385
Residences) Stampin Baru
Off Jalan
The Fifth Ryegates Lapangan Lee Onn Construction Co. 861 - 1,277 72 439 - 465
Terbang
Jalan Central
Urban Residences E-Heritage SB 1,409 -1,560 136 627 - 723
Timur
Jalan Batu Tecktonic & Sons Holdings
Yarra Park 940 - 1,240 195 400 - 411
Kawa SB
Jalan Haji
Kafaz River Residence Urbanpro Development SB 740 - 1,200 66 From 440
Mataim
The Podium Jalan Keretapi Chen Ling 964 - 1,460 395 522 - 603
Jalan Stapok
Mackenzie Avenue Block B Lee Onn Construction Co. 1,520 128 310 - 380
Utara
Jalan Ong
LUMOS Residence Benta Mewah 1,065 -1,181 72 588 - 740
Tiang Swee
Jalan Durian
Tecktonic & Sons Holdings
Armadale Residences Burung, 492 - 1,459 141 510 - 570
SB
Stampin
Off Kuching-
Avona Residence @ The
Samarahan Ibraco Berhad 538 - 1,388 298 540 - 550
Northbank
Expressway
Doncaster Residence @ Hup Tecktonic & Sons Holdings
Jalan Hup Kee 699 - 1,259 216 417 - 453
Kee SB
Loring Tabuan
Tabuan Residences Timur 3, Jalan Lee Chuan Hong Co. SB 490 - 770 64 535 - 582
Tabuan
Off Jalan
The Cheers Song/Tabuan Twin Revenue SB 780 - 800 80 596 - 703
Dayak
Jalan Matang -
M2 Residensi Matang 2 Kampung PR1MA Development SB 910 & 978 448 276 - 297
Paroh
Jalan Batu
Sapphire On the Park Tower 2 Naim Holdings Berhad 764 - 3,390 166 500 - 600
Lintang
35
36
37
OFFICE
OFFICE
KLANG VALLEY
The soft market and high pipeline supply continued in 2019 for the purpose-built office market. The
One Belt One Road initiative and the trade tension between US-China have seen increased Chinese
presence in the Malaysian market.
CONCERN ON EXCESS SUPPLY OVER DEMAND Other financial institutions preparing to relocate to their
own buildings in TRX will further increase the void in
4 completions of purpose-built office (PBO); Menara existing buildings in the Golden Triangle. This has raised
Etiqa in Bangsar, Symphony Square in Petaling Jaya, the concern of landlords to fill up their soon-to-be vacant
Menara Prudential in TRX and KYM Tower in Mutiara buildings.
Damansara, have pushed up cumulative supply to 111.9
million square feet. Overall vacancy rate continued to PBO DEVELOPMENTS TO COMPLETE IN 2020
increase by 1.0%, y-o-y (3Q 2018: 18.6%). Another DEVELOPMENT LOCATION EST. NLA
10.23 million square feet or 17 PBOs are in the pipeline (sq. ft.)
which could push the vacancy rate even higher to
Exchange 106 2,500,000
between 19.9% to 21.5% in the next 3 years. 66% of Tun Razak
future supply will be in Kuala Lumpur city, as the preferred HSBC HQ (TRX) Exchange 570,000
location for corporations. (TRX)
Affin HQ (TRX) 580,000
Average Grade A rental remained stable at RM6.95 per Jalan Sultan
Menara Hap Seng 3 240,000
square foot, with yields ranging from 5.5% to 6.0%. Ismail
Wisma MPL in Jalan Raja Chulan was acquired by Asia
Sapura Corporate
New Venture Capital in June 2019 , with a transacted HQ
KLCC 500,000
price of RM189 million. Similarly, Wisma KFC was sold
by Employee Provident Fund (EPF) to Singapore’s Royal Jalan Tun
TCM Tower 380,000
Razak
Group, for RM130 million, which is planned to be
converted into a hotel. Kota
Tropicana Gardens 219,000
Damansara
Tun Razak Exchange (TRX) welcomed its first tenant, HCK Tower @
Prudential Insurance into Menara Prudential , leaving a Damansara 347,000
Empire City
large vacant space at its previous location.
Abbreviation: EST. = Estimated, NLA = Net Lettable Area, sq. ft. = square feet
Source: CBRE | WTW Research.
ANNUAL SUPPLY & DEMAND IN KLANG VALLEY
Annual Supply Annual Demand Vacancy Rate (%)
5.00 25
4.00 20
3.00
Vacancy Rate (%)
NLA in mil. sq. ft.
15
2.00
10
1.00
0.00 5
2015 2016 2017 2018 2019e
-1.00 0
Abbreviation: NLA = Net Lettable Area, mil. = million, sq. ft. = square feet
Source: CBRE | WTW Research
39
OFFICE
KLANG VALLEY
OUTLOOK Thus, partnering with co-working operators may be

REPURPOSE FOR A NEW LIFE an alternative way to increase rental income and
improve landlord-tenants relationships. Proper fit-outs
With rising concern over upcoming supply, existing for co-working, especially for aged buildings will
landlords and investors need to put more effort into asset enhance the property experience, maximise rents and
enhancement or conversion/redevelopment to other tenancies.
commercial or residential uses to preserve property values
and existing prime city addresses. The current flexible space trend is influencing
landlords to redesign their traditional office space to
Upgrading of old buildings, especially in less strategic match the needs of the ever changing labour force.
locations, will extend their economic life and value. In
fact, countries like Australia and the Netherlands have SEREMBAN
exemplified diverse and innovative conversions whereby
office buildings are being repurposed for education and The shop office market in Seremban continued to face an
healthcare uses. oversupply situation, with more demand towards stratified
shop offices. This market is mainly driven by investors,
A few older office buildings were successfully converted to which then has impacted on occupancy rates.
hotels such as Holiday Inn Express, Wolo Bukit Bintang,
Ansa Hotel and Oasis Suites Kuala Lumpur (previously Location continued to be the main pull factor. For new
known as Menara ING, Wisma KLIH, Wisma Peladang commercial areas, international F&B retailers and
and Plaza Atrium respectively). Bangunan Bank Rakyat at financial institutions have contributed to higher
Jalan Tangsi was converted to educational use. occupancies.
By 2020, Menara HLA, a 20-year old office building with The PBO sector is a tough market in Seremban with direct
40% current occupancy, is planned to reinvent itself into competition from shop offices offering lower rentals.
HLX, Malaysia’s first innovation exchange, a combination Sustainable demand from F&B retailers, focusing on
of traditional tenants and co-working and co-living established residential areas, are expected to ease the
spaces, F&B outlets, and event spaces. It will be a one oversupply situation.
stop centre for corporate and start up companies.
However, there needs to be adequate government

support to facilitate efficient, hassle-free building
upgrading and conversion. Early planning permission
from the local authorities is a pre-requisite and a proper
viability study must be done for the appropriate alternate
usage.
CO-WORK FOR PERFORMANCE
The current trend of flexible/co-working space

showed significant growth in 2019, with the entrance
of global players and active expansion from local
operators. These new space trend is offering various
facilities and services for a more enriching business
environment.
Landlords may seek co-working space operators to

enhance their offerings and provide better amenities
within their buildings. A co-working dimension may
generate better collaboration and create new
occupiers demographics.
Co-working space may increase significant footfall

and demand for commercial facilities and amenities. Exchange 106
Source: Mulia Property Development Sdn Bhd
40
OFFICE
PENANG
As major upcoming Purpose-Built Office (PBO) buildings are scheduled for completion in the medium
term, pent-up demand for newer and prime office accommodation would continue in the short term.
Active promotion of Penang as a centre of Global Business Services (GBS) by the Penang State
Government has prompted the growing demand for MSC status or quality office space. Average rentals
would increase slightly in the near future amidst stable occupancy rates. The co-working office space is
expected to continue to grow.
PENT-UP DEMAND IN THE SHORT TERM AVERAGE RENTALS WOULD INCREASE

AMIDST STABLE OCCUPANCY
There was no PBO building completed in 2019. In the
past 10 years, new office accommodation in Penang has The overall occupancy rate of PBO buildings in Penang
been limited. Developers were focused on developing state generally remained stable at approximately 83%.
apartment/condominium units which provided a faster The overall occupancy rate in Penang Island was
return. approximately 84%, while in Seberang Perai it was 79%.
The occupancy rates are anticipated to remain stable in
Office occupiers are seeking for new office buildings the near future.
which could cater to their contemporary needs and
enhance the portrayal of corporate image. New prime Rentals of prime office space in Georgetown were
PBO buildings such as Hunza Tower and Straits Quay between RM2.50 and RM3.50 per square foot per month
Commercial Suite are enjoying commendable occupancy compared to RM3.30 to RM4.50 per square foot per
rates although charging new benchmark rentals. The month for prime office accommodation outside
tenants comprise a mixture of newly set-up offices as well Georgetown, particularly new buildings in Bayan
as existing offices relocating from older office buildings. Lepas/Bayan Baru area and at Bandar Tanjung Pinang.
Pent up demand for newer and prime office Rentals of office space in most buildings are expected to
accommodation would continue in the short-term as increase in the short-term, due to increasing outgoings/
major upcoming PBO buildings are scheduled for maintenance cost. With newer and prime office buildings
completion in the medium term. Older buildings are likely entering the market with higher asking rentals, the overall
to experience a slide in demand thus lower rentals and average rental of prime accommodation would also
capital prices. increase.
DEMAND FOR MSC STATUS OFFICES

SUPPLY AND PERFORMANCE OF PBO IN PENANG
The state government has been actively promoting Annual Supply (mil sq.ft)
Penang as a centre of Global Business Services (GBS). Annual Net take-up (mil sq.ft)
High quality manufacturing investment which are of Vacancy Rate (%)
knowledge-intensive and innovation-led have been
0.60 20
aggressively pursued by the Penang State Government.
0.50
Net Lettable Area (mil. sq. ft)
There will be demand for office space from

industrialists/manufacturers progressing upstream to 0.40 15
design and research activities, to accommodate the
Vacancy Rate (%)
0.30
highly skilled workforce and related supporting industries.
0.20 10
In catering to the demand from companies which seek 0.10
MSC status or quality office space, the Penang
0.00 5
Development Corporation (PDC) has commenced
-0.10 2015 2016 2017 2018 1H
construction of GBS@Mahsuri, which is slated to be 2019
completed by mid 2020. Located beside the current -0.20 0
headquarters of PDC in Bayan Baru, GBS@Mahsuri will Abbreviation: mil. = million, sq. ft. = square feet
feature a 2-storey building offering approximately 80,000 Source: NAPIC, CBRE | WTW Research
square feet of office space.
41
OFFICE
PENANG
FUTURE DEVELOPMENTS AWAY FROM CBD in 2019 remained steady, prime locations are highly
preferable, especially in newly established residential
Major PBO buildings are being developed and planned and commercial areas, with secondary locations
away from the CBD of Georgetown to the south-eastern benefitting from some spill-over due to limited supply
portion of Penang Island and Seberang Perai. This is due in the primary areas. Rental offered is slightly higher
to the land scarcity in the CBD which restrict new for shopoffices, at RM3.50 per square foot compared
development. to RM2.00 per square foot for PBO space.
GROWING CO-WORKING OFFICE SPACE IPOH
The co-working office space in Penang has grown in The performance of shopoffices improved due to
2019. Common Ground opened 18,000 square feet at increased retail business, office and tourism uses. The
Moulmein Rise Shoppes in Pulau Tikus, Georgetown overall performance in 2020 will be stable in Ipoh
while Spaces Beach Street opened 25,000 square feet at with firm demand and good outlook in terms of
former Standard Chartered Bank building on Beach occupancy.
Street, Georgetown.
In the near future, co-working office is expected to PERFORMANCE OF PURPOSE BUILT OFFICE
increase further supported by demand from a diverse SPACE IN PENANG
range of industries and professions. Larger companies
who seek for flexibility and practicality in their workspace RM5.00
arrangement may also opt for co-working space. With the
expected growing demand, operators of co-working RM4.00
office space are able to secure office accommodation at
RM psf/ month
attractive rates. RM3.00
ALOR SETAR RM2.00
The PBO market has been soft in 2019 due to RM1.00

declining demand and stiff competition from the
alternative shopoffice space. Tenant retention with
RM0.00
stagnant rental offered is the prevailing market. No
Georgetown Outside Georgetown
significant movement is expected for PBOs in Alor
Setar in 2020. Abbreviation: psf = per square foot
The overall performance of shop offices in Alor Setar
Artist Impression of GBS@Mahsuri Artist Impression of GBS@Mahsuri

Source: Penang Development Corporation (PDC) Source: Penang Development Corporation (PDC)
42
OFFICE
ISKANDAR MALAYSIA
Purpose-built office (PBO) market remained subdued with new office buildings continue entering the
market. The vacancy rate hiked up above 35% and market players are offering competitive rental
packages to seize the limited pool of office users.
OFFICE SPACE OVERSUPPLY WORSENS

Upon full completion, new PBO will contribute almost
The PBO sector in Iskandar Malaysia (IM) remains 50% of the entire office supply. We anticipate the
uninspiring. There were two new completions in the occupancy of office in IM will remain subdued while
region, i.e. d’Pristine in Medini and Menara MBJB in competitive rental packages will be offered to attract
Johor Bahru city centre. These two buildings brought users.
additional 870,000 square feet of lettable space to the
already-crowded IM PBO market.
NOTABLE PBO BUILDINGS TO COMPLETE IN IM
According to NAPIC Report 1H 2019, the existing office DEVELOPMENT COMPLETION EST. NLA
YEAR (sq. ft.)
space in Iskandar Malaysia was 10.39 million sf, about
7.59 million square feet privately-owned while MVS North Tower,
2020 350,000
government buildings took the remaining 2.80 million Kota SouthKey
square feet. Out of 7.59 million square feet of private
MVS South Tower,
office space, 5.17 million square feet was occupied in 2020 350,000
Kota SouthKey
2018. The vacancy rate by end of 2019 is estimated at
about 36%. UMCity Premium
Corporate Office 2020 110,000
Tower, Medini
The rising vacancy rate is mainly contributed by a huge
flow of private office space into the market since year Medini 10, Medini 2020/2021 415,000
2014. Between 2014 and 2018, a total of 1.7 million Menara Bank
square feet of new office space entered into the market. Rakyat@Coronation 2021 550,000
In addition, 1.78 million square feet of office space is Square, JBCC
presently in the pipeline and will enter the market by TOTAL PRIVATE OFFICE SPACE 1,775,000
2020/2021.
Abbreviation: EST. = Estimated, NLA = Net Lettable Area, sq. ft. = square feet
SUPPLY AND VACANCY RATE OF PRIVATELY- TOTAL PRIVATE PURPOSE-BUILT OFFICE IN

OWNED PBO IN ISKANDAR MALAYSIA ISKANDAR MALAYSIA
Total Private Space
Vacancy Rate (%)
9 40
8 35
Upcoming PBO 24%
7 30 1,776,000 sq. ft.
6
Supply (mil. sq. ft)
Vacancy Rate (%)
25
5 Older PBO 52%
20
4 3,825,300 sq. ft.
15
3
2 10 New PBO 24%
1,814,000 sq. ft.
1 5
0 0
2015 2016 2017 2018 2019e
Abbreviation: mil = million, sq. ft. = square feet Abbreviation: PBO = Purpose Built Office, mil = million, sq. ft. = square feet
Note: Data for the full year of 2019 is based on estimation. Source: NAPIC, CBRE | WTW Research
43
OFFICE
ISKANDAR MALAYSIA
DECLINING RENTAL AND RISING VACANCY The shop office segment remained stable in 2019,
with more demand coming from F&B retailers. Good
We foresee downward rental adjustments for new PBOs locations in established housing areas including Desa
in Johor Bahru city centre and Medini/Puteri Harbour Botani Business Park continued to attract sustainable
localities in the near future with competitive rental rates demand. Generally, the PBO and shop office sectors
ranging from RM4.00 to RM4.50 per square foot and will remain stable, with shop offices still the preferred
RM3.00 to RM4.00 per square foot respectively. Rental choice.
rates for old PBOs in Johor Bahru city centre will adjust to
a lower level of RM2.00 to RM3.00 per square foot to MELAKA
retain the existing tenants.
PBO in Melaka remains stable. With no new
The flight-to-quality phenomenon is expected as the completions, office rentals will be stable in 2020.
office occupiers look to relocate to newer and better Due to weak market sentiment, shop offices were in a
quality office space if competitive rentals are offered by downward trend in 2019. However, by expansion of
the market. new businesses amongst F&B retailers targeting
tourists should boost sentiment. To ease the
Old/ageing PBOs will face the risk of losing tenants due oversupply situation, developers may opt for pocket
to the increasing number of better-featured PBOs in the developments with main road frontage.
market. Rental reduction and refurbishments are expected
to retain the existing tenants. We reckon the vacancy rate With no real movement, PBOs and shop-offices in
of PBOs will increase to approximately 40% by end Melaka are expected to stagnant. Shop offices are
2020. preferred, as rental offered is slightly lower at RM1.80
per square foot compared to RM3.20 per square foot
BATU PAHAT for PBOs.
There was limited supply and demand in the Batu OUTLOOK

Pahat PBO market in 2019 and overall performance
is expected to remained stagnant in 2020. The PBO sector is a tough market with direct
competition from shop offices with lower rentals being
offered.
CUMULATIVE SUPPLY AND AVERAGE RENTAL

OF PRIVATELY-OWNED PBO IN ISKANDAR
MALAYSIA
Cumulative Supply JBCC (New PBO)
JBCC (Old PBO) Medini/Puteri Harbour
12 6.00
10 5.00
Average Rental (RM per sq. ft.)
Cumulative Supply (mil sq. ft.)
8 4.00
6 3.00
4 2.00
2 1.00
0 0.00
2015 2016 2017 2018 2019e 2020f 2021f
Abbreviation: sq. ft. = square feet, per sq. ft. = per square foot d’ Pristine Tower
Note: Data for the full year of 2019 is based on estimation. Source: CBRE | WTW Research
Data for full year of 2020 & 2021 is based on forecast.
44
OFFICE
EAST COAST
Requiring a paradigm shift.
KUANTAN services. Well located shop offices attracted significant

demand and good capital value. Vibrant locations such
Kuantan’s overall PBO market was stagnant in 2019. as Kota Bharu and Gua Musang remained attractive
PBO is not a preferred choice amongst local despite a drop in transaction activity. Notable
corporations; demand is mainly by the multi-national transactions recorded for 2- to 4.5-storey shop offices
corporations for corporate branding and image. ranged from RM400,000 to RM1 million per unit.
In the rise of online shopping, the oversupply of shop KUALA TERENGGANU

offices in Kuantan increased especially in the outskirts
area. Investors and owners remain cautious due to lack The Kuala Terengganu PBO market was stable
of demand from tenants and this sector is expected to throughout 2019, with limited supply and is expected
remain in a downward trend in 2020. Nevertheless, F&B to be stagnant in 2020, with no upcoming
retailers, local businesses and decentralisation of developments.
population are expected to support demand for future
developments. Shop offices also generally remained stable in 2019.
The highly anticipated Kuala Terengganu City Centre
KOTA BHARU in Tanjung, consisting of a shopping mall and 4-
storey shop offices will stimulate market interest.
The PBO market in Kota Bharu picked up in 2019 and Shopoffice rentals and yields offered are slightly
will continue to be stable in 2020, with limited supply and higher as compared to PBO.
demand. PBOs are mainly occupied by financial
institutions, corporations, insurance companies and OUTLOOK
government-linked entities which require a good image
and better facilities. With no change in tenant PBO is the preferred option amongst large
movements, rentals have been stagnant. Transaction corporations whilst shop offices mainly cater towards
activity remained slow, and with no new supply, this local businesses. The outlook for shop offices is better
sector will continue to be quiet. in Kota Bharu and Kuala Terengganu; however
investors remained cautious in Kuantan as supply
Shop offices generally remained stable with good exceeds demand.
demand from F&B retailers, fashion, education and
45
OFFICE
SABAH
KOTA KINABALU: An uneventful year with the office sector remaining muted and slow uptake in
occupancy.
OFFICE SECTOR LACKLUSTRE

OUTLOOK
The office sector is lacklustre with a decline in sub-sale
activities up to 3Q 2019 compared to 3Q 2018. The Office demand in Labuan is dominated by offshore
sector is expected to remain little changed except rents companies. In Tawau, shopoffice demand comes
turning competitive as supply exceeds demand. from local businesses and F&B retailers.
The year saw the demolition of Wisma Gek Poh office

building in the Central Business District to make way for a
new, 220-room 5-star city hotel to be known as Hyatt
Centric Kota Kinabalu. Wisma AIA in Karamunsing
locality was also converted into a 37-room boutique
hotel known as Stanton Hotel.
Wisma Langat located along Jalan Penampang was

completed and opened in 2019. The 6-storey office
block also accommodates a sub-basement car park and
ground floor retail shops.
LAHAD DATU
The Shop office market in Lahad Datu remained stable in

2019 and is expected to extend into 2020, with demand
mainly from small local businesses. The slow demand will Wisma Langat
Source: WTWS Research.
exert further pressure on rentals and compress yields.
TAWAU
SUPPLY OF PURPOSE-BUILT OFFICE IN
The office sector in Tawau remains the same as in KOTA KINABALU
previous years. Conventional shopoffices are preferred Cumulative Supply (mil. sq. ft.)
compared to purpose-built offices although new Occupancy Rate (%)
shopoffice launchings have slowed down. 2-storey
9.0 94
shopoffices are the most transacted, with prices ranging
from RM890,000 to RM1.3 million. Predominant use for 8.0 93
the ground floor retail portion are for food and beverage 7.0 92
Cumulative Supply (mil. sq. ft)
(F&B) and entertainment. 91

Occupancy Rate (%)
6.0
90
5.0
LABUAN 89
4.0
88
Purpose-built office space in Labuan are mainly 3.0 87
sought by offshore companies. The market is 2.0 86
expected to remain stable in 2020 with no new 1.0 85
supply. The performance of shop offices remained
firm as most of the units are already clustered in 0.0 84
Labuan town centre, primarily occupied by businesses 2015 2016 2017 2018 2019e
related to the offshore companies in Labuan. The Abbreviation: mil sq. ft. = million square feet, per sq. ft. = per square foot .
shop office market in Labuan is expected to be stable Source: NAPIC, CBRE | WTWS Research.
with sustainable rents and yields.
46
OFFICE
SARAWAK
KUCHING: Demand for purpose-built offices continues to be stagnant with demand confined to pre-
leased tenants or government agencies. Shop-offices are in abundance and having a challenging
time trying to rent out.
PURPOSE BUILT OFFICE SECTOR REMAINED 2019 saw the completion of 8 units of 3- and 4-four
STAGNANT storey shopoffices at TT3 Plaza, the last phase of their
overall Tabuan Tranquility township, which will also
2019 was a quiet year for the PBO sector in Kuching. include a 14-storey SOHO with commercial podium, a
There were no new office projects launched or completed 6-storey education block and a food court; and the last
in 2019. Due to the increased stock of office space in the twenty-three units of shop offices at Gala City Prime
market and with shop offices constituting a significant developed by M/s Tecktonic & Sons.
share of the completions, take up and rentals remain
stagnant with rentals averaging about RM2.70 per square
foot.
SHOP OFFICES IN ABUNDANCE
2019 saw a substantial decrease in completions of shop

offices in Kuching. Based on NAPIC’s data, incoming
supply as at 2Q 2019 is estimated at 800 units, a drop
from the previous y-o-y figure of 1,053 units, of which
15% were started this year. New commercial shops
launched include The Northbank Shop Office (23 units)
along the Jalan Kuching-Samarahan Expressway and
Pines Square (154 units) at Eden Parade along Jalan Batu
Kawa.
The significant increase in total supply of shop offices in

the Kuching market is still felt in the high vacancy rates
Gala City Prime shops at Jalan Tun Jugah
and reduced shop office rentals and sales. Source: WTWY Research.
SUPPLY AND RENT OF PURPOSE-BUILT OFFICE IN KUCHING

Cumulative Supply (mil. sq. ft.) Average Office Rent
(RM psf)
6.20 3.05
Cumulative Supply (mil. sq. ft.)
6.00 3.00
5.80 2.95
5.60 2.90
2.85
RM per sq. ft.
5.40
2.80
5.20
2.75
5.00 2.70
4.80 2.65
4.60 2.60
4.40 2.55
2015 2016 2017 2018 2019e 2020f
Abbreviation: RM = Ringgit Malaysia, mil. = million, per sq. ft.= per square foot
Note: Data for the full year of 2019 is based on estimation
Source: NAPIC, WTWY Research.
47
OFFICE
SARAWAK
MIRI OUTLOOK
PBO in Miri is a niche market due to limited supply and The PBO is a niche market with limited supply and
demand and mainly occupied by oil and gas related demand and remains generally stagnant for all
businesses. The market is expected to remain stable. markets. Construction of such is adhoc.
Shop offices are facing an oversupply challenge and
continued to show a downward trend. The oversupply Oversupply situations persist in the shop office market
situation in Miri is expected to continue in 2020. segment for Sarawak. A recovery in the Sibu market is
possible with increasing demand from F&B and local
BINTULU businesses, whilst other markets are finding it tough
to fill up the vacant/vacated units.
The PBO market in Bintulu remained stagnant in 2019
and will continue into 2020. However, there was a
downward trend for shop offices, thus becoming a
tenant’s market with various space options and lower
rentals. Matured/established shop office locations are
more preferred.
SIBU
PBOs in Sibu were stable in 2019, and expected to

continue in 2020, driven by companies seeking better
corporate image and branding.
The shop office market also remained stable, with

slow recovery from oversupply, mainly driven by the
increasing trend of F&B and local businesses in prime
locations. New developments strategically located in
neighbourhood areas, are expected to gain good
TT3 SOHO at Kuching-Samarahan Expressway
take up. Source: WTWY Research.
TT3 Plaza Shop Offices at Kuching-Samarahan Expressway

Source: WTWY Research.
48
RETAIL
RETAIL
KLANG VALLEY
Traditional shopping is currently challenged by modern approaches, leveraging on technology and

increasing customers’ demand for lifestyle experiences while shopping. Millennials have also pushed
retail boundaries towards a community concept; everything is in one place.
A STEADY RETAIL MARKET rent of RM29 per square foot in 2018 while Outside
Kuala Lumpur the average net rent was RM16 per square
Retail sales growth as of 3Q 2019 decreased from the foot.
previous quarter to 1.8%. The Malaysian Institute of
Economic Research (MIER) Retail Trade Index (RTI) also
fell 9 points in 3Q 2019 to 84 points, the lowest reading SELECTED NEW RETAIL MALLS IN 2020 - 2022
since 4Q 2017. These numbers portray weak purchasing YEAR DEVELOPMENT LOCATION EST. NLA
power in the retail market. Consumers are more cautious (sq. ft.)
and concerned.
2020 Sapura Corporate KL City 120,000
HQ Centre
Retail space in Klang Valley increased by 940,000 square
feet with the completion of Central Plaza @ i-City which Tropicana Garden Kota 1,000,000
Mall Damansara
marked many firsts in Selangor: the first SOGO, first
IMAX cinema and first Village Grocer. The mall is 2021 Datum Jelatek Jelatek 491,500
currently well-occupied with its layout, retail offerings and
Eco Hill Walk Mall Kajang 170,000
facilities inspired by a blend of Malaysia and Thailand-
inspired innovations and concepts. Coming up by year Tun Razak Tun Razak 1,300,000
end is Sime Darby Property’s Quarza Mall. Exchange Lifestyle Exchange
Quarter
By 2020, more retail mall space will be completed Warisan Merdeka Stadium 900,000
Outside Kuala Lumpur: 1.98 million square feet Mall Merdeka
compared to 611,500 square feet in Kuala Lumpur.
Mitsui Shopping Bukit Bintang 1,200,000
Park Lalaport KL
As at 3Q 2019, the occupancy rate of retail malls in
2022 Pavilion Bukit Jalil Bukit Jalil 1,800,000
Kuala Lumpur rose slightly while those Outside Kuala
Lumpur decreased slightly. Overall, retail occupancy in Empire City Mall Damansara 2,000,000
the Klang Valley remained positive. Utama
Pavilion Damansara 1,100,000

From REITs 2018 annual reports, the average net rent of Damansara Heights
prime malls was around RM16 per square foot per Heights
month. Malls in Kuala Lumpur had a higher average net Abbreviation: EST. = Estimated, NLA = Net Lettable Area, sq. ft. = square feet
SUPPLY AND PERFORMANCE OF RETAIL IN KLANG VALLEY

KV Annual Supply (mil sq. ft.)
KV Annual Demand
KV Vacancy Rate
Annual Supply / Demand (mil. sq. ft)
4.5 16
4.0 14
3.5 12
Vacancy Rate (%)
3.0 10
2.5
8
2.0
1.5 6
1.0 4
0.5 2
0.0 0
2015 2016 2017 2018 2019e 2020f
Abbreviation: KV = Klang Valley, mil. = million, sq. ft. = square foot
50
RETAIL
KLANG VALLEY
Parkson exited Suria KLCC after 20 years which will technology usage is currently a focus of retail malls,
impact the retail trade mix. Sungei Wang Plaza was which is seen crucial as a pull factor. Following on the
refurbished with an improved façade and interior design, rising trend of social media, retail malls are also
including a new zone named “Jumpa” featuring a family developing attractions through local artists, such as mural
entertainment park. Starhill Gallery has started renovation arts and more, which create new experiences for
works to re-brand as The Starhill in 2021. customers.
There were several international brand entries into Klang BRINGING LIFESTYLE/COMMUNITY INTO
Valley’s retail market ranging from beauty and wellness, RETAIL MALLS
entertainment, accessories and apparels, to F&B - Wycon
Cosmetics, Le Labo, Manekineko, Tiger Sugar, Christian The focus of retail malls has expanded into
Loubotin and Steve Madden. multifunctional mixed-use spaces for the community with
a variety of activities including working out, dining,
Departmental stores are fighting for survival while niche playing, learning, reading and the latest offer; co-working
supermarkets and convenience stores are building their such as Common Ground in MyTown Shopping Centre
way up in the retail market. and WORQ in KL Gateway Mall. These innovations
could decrease vacancy and drive additional foot traffic
OUTLOOK into a retail mall.
TECHNOLOGY ADVANCES
“Retailtainment” is also becoming an attraction especially
Traditional shopping is being challenged by technology for millennials, offering new experiences, entertainment,
inroads adopted by businesses and retail malls. This is in adventure and games. It is a growing trend in the retail
the form of online payment, online shopping platform, market meant to deliver excitement and attract customers.
brand specialized application, artificial intelligence,
augmented reality and more. SEREMBAN
A number of malls have rolled out shopper tracking Retail mall performance in Seremban is expected to
systems to identify shoppers’ characteristics, frequency of remain stable into next year. AEON Nilai which started
visit and buying patterns in order to enhance marketing operation in 1Q 2019 is a strong retailer attracting
and promotional strategies. shoppers from Seremban and Klang Valley. Education
institutions and industrial players in Nilai may contribute
Mall navigation applications were introduced to improve more foot traffic.
shoppers’ convenience. A few malls and retailers are
introducing facial-recognition cameras which will track It will be a benchmark for other neighbouring retail malls
the in-store journeys of customers. following the current trend for multi-function malls for
shopping, leisure activities and family gatherings, all
Enhancing customers’ shopping experiences through under the same roof.
Central i-City, Shah Alam, Selangor

51
RETAIL
PENANG
The retail property sector is generally subdued. Disparity in performance between the better and
under-performing retail complexes will remain obvious. Competition is anticipated to intensify with
new retail complexes entering the market.
LESS OPTIMISTIC MARKET to sustain their occupancy rates and high rentals. On the
other hand, most stratified shopping complexes with
Lately, the prevailing consumer and business sentiment multiple ownership with poorer tenant mix experienced
has been less optimistic. This sentiment is expected to reduced occupancy rates and rentals due to low footfalls
prolong to the near future. and business volume. Older and underperforming
complexes are also likely to drag down the overall
Consumers from the low-income group will be anxious occupancy rate and average rental. As such, the disparity
about rising prices. Shopping plans will be limited by in performance among retail complexes is anticipated to
flagging purchasing power. Household demand will remain obvious in the future.
proceed cautiously, particularly for interest- sensitive and
big ticket items . It may impact retailers’ revenue and their ADDED SHOPPING OPTIONS
ability to pay rentals.
In 2019, Tesco Bagan Ajam (approximately 100,000
Revenue for retailers is expected to sustain but not grow square feet) and Ikea Batu Kawan (approximately
as consumers could be held back by lack of income and 470,000 square feet), opened for business in Seberang
eroded purchasing power due to rising cost of living. Perai. City Junction (formerly known as City Mall @
Hence, the ability of retailers to pay increased rentals Tanjung Tokong) was also completed and progressively
would be constrained. In turn, prices and rentals are likely filled. Based on notable upcoming complexes, a
to be flat in the near future. substantial increase of supply will be seen in the medium-
term.
OBVIOUS PERFORMANCE DISPARITY
EN-BLOC TRANSACTION
The incoming retail complexes are better planned in
terms of design and concept to attract shoppers which A subsidiary company of Ideal United Bintang
will increase challenges to ageing retail centres. The International Berhad (IUBIB) entered into a Conditional
existing retail centres have to put on a lot more effort to Sale and Purchase Agreement in September 2019 to
stay competitive in the market. Hence, the mixed purchase 1st Avenue Shopping Mall. The transacted price
performance among retail complexes is expected to be was RM153 million, or approximately RM375 per square
more obvious in the future. Single ownership retail foot on the net lettable area of 407,076 square feet.
complexes such as Gurney Plaza, Gurney Paragon and Opened nine years ago, 1st Avenue Mall is located in
Queensbay Mall on Penang Island, and Sunway Carnival George Town and is connected to Komtar and Prangin
and Aeon Mall in Seberang Perai, are expected continue Mall, through indoor pedestrian bridges.
SUPPLY OF RETAIL COMPLEXES IN PENANG

Annual Supply (Mil) Annual Net take-up Vacancy Rate
1.4 31
1.2
Annual Supply / net take-up (mil
30
1
Vacancy Rate (%)
0.8 29
0.6 28
0.4 27
0.2
0 26
-0.2 2015 2016 2017 2018 1H 2019 25
Abbreviation: mil. = million, sq. ft. = square foot
52
RETAIL
PENANG
MARKET REPOSITIONING Demand for retail here mostly comes from the local Alor
Setar shoppers hence necessary changes may be needed
The emergence of mobile shopping applications and to sustain existing malls and induce higher shopper
online shopping have given pressure to retail centres. traffic.
While the online boom has generally impacted the
traditional bricks-and-mortar retailers, certain retailers IPOH
have redefined themselves by using e-commerce and
thrive in the digital economy. Retail mall performance in Ipoh remained stable in 2019
and is expected to extend into 2020. Entries of a few
Omnichannel or online-to-offline (O2O) retailing model well-known international brands and franchised outlets
has been embraced by many retailers to drive their sparked interest in the retail market. However, online
business. The customer can seamlessly shop online from shopping platforms are challenging retail malls in Ipoh as
a desktop, mobile device or at a physical store. For elsewhere in the country.
example, fashion retail brand Uniqlo allows customers to
buy its products online — either via its website or mobile NOTABLE PURPOSE-BUILT RETAIL
app — and collect them at their preferred outlet. Retail COMPLEXES TO COMPLETE IN PENANG
centres are anticipated to reposition their physical retail
space to provide retail-tainment / active entertainment DEVELOPMENT EST. NLA COMPLETION
experiences that only physical retail stores can offer. As (sq. ft.) YEAR
such, shopping malls would have to be repositioned as
PENANG ISLAND
interaction centres for leisure, social and recreational
activities to provide more entertaining experience which Penang Time Square
230,000 2020
appeal to shoppers. Phase 3
Retail Mall @
ALOR SETAR Sunshine Tower
900,000 2021
Hypermarkets remain as the main concept in Alor Setar. SEBERANG PERAI

Retail performance declined in 2019 and is expected to
Sunway Carnival
extend into the following year. Some of the challenges in Extension
500,000 2022
Alor Setar’s retail market is lower occupancy rate due to
local shoppers growing attraction to online shopping and GEMS Megamall 1,200,000 2022
more cautious spending. New and old malls are also Abbreviation: EST. = Estimated, NLA = Net Lettable Area, sq. ft. = square feet
competing for take up rate and shopper traffic against Source: CBRE | WTW Research
one another.
IKEA Batu Kawan

53
RETAIL
ISKANDAR MALAYSIA
The entry of new malls will undoubtedly bring additional pressure to the retail market. However,
branded malls with strong management are still expected to outperform with strong footfall and
good take-up.
NEW MALLS SPRINGING UP In contrast, shopping malls which cannot maintain their
footfall will face the difficulty of retaining retailers or even
New shopping malls were springing up all over Iskandar closure of the mall. For instance, Danga City Mall in
Malaysia, exciting avid shoppers in the region. In 2019, Johor Bahru city centre closed for business in mid 2018
Iskandar Malaysia welcomed the opening of 5 malls, i.e. while Skudai Parade, auctioned 231 stratified retail lots in
R&F Mall, The Mall @ Mid Valley SouthKey, Toppen the market.
Shopping Centre JB, Beletime Danga Bay and Sunway
Big Box. There were also the openings of the third phase Hypermarket operator GCH Retail Sdn Bhd also closed
of Johor Premium Outlets (JPO) and Tesco Setia Tropika. down its Giant Hypermarkets located at Taman Nusa
Bestari and Taman Pulai Utama. These 2 stores have
The above-mentioned new malls and hypermarkets been taken over and are currently operating as TF Value-
added a total of 3.34 million square feet of retail space Mart. It is possible more hypermarkets will close
into the market, bringing the total retail space to especially with over-competitiveness within the same
approximately 21.88 million square feet. catchment area.
There are 4 upcoming malls with expected completion STABLE RENTAL AMIDST INCREASING
around 2020/2021, which will contribute an additional 1 VACANCY
million square feet of retail space. With the emergence of
new malls, stiff competition between malls is expected, The average rental for prime shopping malls in good
bringing pressure on both rental and occupancy rates. locations remained around RM25 per square foot. Prime
shopping malls registering strong footfall are envisaged
AFTERMATH OF NEW MALLS to have positive rental reversions. In comparison, rental
reduction can be foreseen by struggling shopping malls.
Shopping malls with strong management teams to curate
the right tenant mix and concepts are envisaged to Based on a retail survey, the vacancy rate for retail malls
perform well and secure high occupancy rates. Retail in 2019 stood at approximately 30% and may increase to
malls such as Paradigm Mall, The Mall @ Mid Valley 35% in 2020.
SouthKey, Johor Bahru City Square and Aeon Tebrau City
have good brand names and are able to drive footfall
and dominate the market in their respective localities.
CUMULATIVE SUPPLY AND AVERAGE RENTAL OF SUPPLY OF RETAIL MALL IN ISKANDAR MALAYSIA
RETAIL MALL IN ISKANDAR MALAYSIA
Cumulative Supply Average Rental Upcoming Retail Mall 6%
25,000,000 30 1,054,700 sq. ft.
Cumulative Supply (mil. sq. ft)
20,000,000
20
RM per sq. ft.
15,000,000
10,000,000
10
5,000,000 New Retail Mall 42%
7,658,000 sq. ft.
0 0 Older Retail Mall 52%
2015 2016 2017 2018 2019e 9,362,047 sq. ft.
Abbreviation: RM = Ringgit Malaysia, mil = million, sq. ft. = square feet,
per sq. ft. = per square foot
Note: Data for the full year of 2019 is based on estimation.
54
RETAIL
ISKANDAR MALAYSIA
SHOPPING PARADISE IN SOUTHERN MELAKA

MALAYSIA
Consistently a tourist hotspot over the years, new
With the invasion of new shopping malls, an increasing malls are expected to emerge. Expectations of the
number of foreign retailers are flocking to Iskandar future retail market is the increase of retail space but
Malaysia. Several brands such as MUJI, Cziplee, TSL also a decrease of occupancy rate. However, the
Jewellery, KyoChon, Carl’s Jr, Kiddomo, SOGO and current performance of retail malls in Melaka remains
Ben’s Independent Grocer opened shop. In addition, stable and is expected to extend into 2020.
Chinese-built shopping malls viz. R&F Mall and Beletime
Danga Bay brought a number of Chinese brands into the OUTLOOK
market such as Emperor Cinema, WOMEI 3D Cinema,
LOVEYOYO Theme Park and Oregin Ji Ke. With the modification of shopping malls’ concept into
one-stop centers providing a variety of F&B and
BATU PAHAT entertainment choices, Iskandar Malaysia’s retail
market will continue to thrive for both locals and
There are only 3 malls in Batu Pahat which are Batu Singaporean visitors.
Pahat Mall, Square One Shopping Mall and The
Summit. Retail malls in Batu Pahat are performing The performance of retail malls in the Southern
well with stable rental and yield, albeit a small supply. Region will remain positive. Retail malls in Melaka are
However, The Summit Batu Pahat faced a decrease in focusing on both local shoppers and tourists.
its occupancy rate which may be due to less vibrant Meanwhile, local shoppers with increasing demands
attractions compared to the other existing retail malls. are the main attention in Batu Pahat.
The Mall @ Midvalley Southkey Toppen Shopping Centre

Source: CBRE | WTW Research Source: CBRE | WTW Research
55
RETAIL
EAST COAST
A quiet gem in the making, the retail market in the East Coast has deepened with a wider retail mix
and new brands to grasp shoppers’ attention.
KUANTAN retail landscape. The rental and yield of retail malls is

stable and is expected to extend into 2020.
The take up rate of retail spaces in 2019 was more active
compared to the previous year, and is expected to OUTLOOK
continue positively into 2020. Yield and rental
performance is expected to be stable. The sustainability of The established trend of retailing in the East Coast Region
the Kuantan malls is supported by new retail brands and are mostly hypermarkets. However, shopping malls in
wider variety of F&B and to entice local shoppers. This Kota Bharu, Kuantan and Kuala Terengganu are gaining
curtailed challenges from Kuala Lumpur malls which are traction. Retail malls’ performances show positive
only 3 hours away by car. numbers, which is encouraging more investments in Kota
Bharu and Kuala Terengganu.
KOTA BHARU
An upcoming mall with retail space of about 369,000

square feet named Platinum Wholesale City Mall is
expected to be completed in 2020 in Kota Bharu. This
new mall will be offering a new concept in Kota Bahru
similar to Kenanga Wholesale City Mall in Kuala Lumpur.
Al-Waqf @ Tunjong is also expected in Kota Bharu’s

retail market with an approximate retail space of
350,000 square feet. Retail malls in Kota Bharu have
been performing positively and is expected to improve in
the following year. Kota Bharu’s retail market has also
witnessed a rising demand for retail variety, new brands
and trends in upcoming and existing retail malls.
KUALA TERENGGANU
The retail market in Kuala Terengganu is still dominated

by a few large hypermarkets namely Mydin, Giant and
The Store. Existing retail malls face less competition due
to limited supply, but the SOGO managed KTCC Mall
Al-Waqf @ Tunjong, Kota Bharu
which is expected to be ready by 2020, may change the Source: CBRE | WTW Research
Platinum Mall, Kota Bharu

56
RETAIL
SABAH
KOTA KINABALU: No major change from previous years with well-managed and strategically located
malls having sustained occupancy and footfall whilst the newer stratified malls are still playing catch up.
NO SIGNIFICANT CHANGES SANDAKAN

There is only one retail mall known as Harbour Mall.
Generally, the retail sector in Kota Kinabalu has been The year also saw the opening of the district’s first
quiet with limited transaction activities. Occupancy Starbucks drive-thru in Bandar Utama and Mydin
and take-up of retail space in newer stratified malls Hypermarket in Sejati Commercial.
have been gradual with suppressed values and rents
as supply exceeds demand. Pressure is also on the OUTLOOK
older malls to reinvent to stay vital. Amidst oversupply Generally, the overall retail performance in Sabah is
of malls, quality retail malls with ever-evolving tenant stable and this will extend into 2020.
mix are expected to retain their performance.
Based on JPPH’s Property Market Report First Half SUPPLY OF RETAIL MALLS IN KOTA KINABALU,
2019, occupancy rate of shopping complexes in Kota PENAMPANG & PUTATAN
Kinabalu, Penampang and Putatan is around 78.5%,
Cumulative Supply (mil. Sq. ft.)
which is marginally lower than 80.7% for the first half
Occupancy Rate (%)
of 2018.
7.00 88
In Kota Kinabalu, incoming new supply will come 86
Cumulative Supply (mil sq. ft)
from the 72,000-square feet Inanam Mall in Inanam 6.50 84
Occupancy Rate (%)

township which is expected to open in 1Q 2020, 82
which add about 11% to existing supply of retail
6.00 80
space within shopping malls. Presently, the only major
retail mall under construction is Pacificity in Likas Bay. 78
It was also reported that the abandoned Star City 5.50 76
Complex has been proposed to be converted into a 74
high-rise mixed development to be known as KK One. 5.00 72
2015 2016 2017 2018 2019e
Abbreviation: RM = Ringgit Malaysia, mil = million, sq. ft. = square feet
Note: Data for the full year of 2019 is based on estimation.
Source: WTWS Research
Pasar Raya Besar Mydin, Sandakan

57
RETAIL
SARAWAK
The retail sector is facing difficult times with falling occupancies and reduced rentals, made worse by
over supply of retail malls
FALLING OCCUPANCIES MIRI/BINTULU
The retail sector in Kuching is now feeling the brunt of the The oil and gas industry and its location near Brunei are
over supply of retail malls completed in recent years the primary factors for Miri’s positive retail market. Still,
amidst the current economic downturn. Retailers are consumers are being prudent in their spending due to the
taking measures such as relocating, downsizing and rise of living costs. Meanwhile, Bintulu is expecting a
restructuring in order to survive. Some exits of major challenging retail market the upcoming mall namely
retailers were witnessed in 2019, such as Metro Jaya Crown Pacific Mall and Boulevard mall which will add
from CityOne Mall and Parkson from Riverside Shopping additional supply to the market.
Mall. A local premium stand-alone supermarket named
Ting & Ting Supermarket decided to call it a day after 62 OULOOK
years of operation.
Inflationary pressures have dampened domestic demand
Older malls are seen succumbing to high vacancies. leading to a highly challenging and competitive local
Some of the once-thriving malls are now a sad sight of retail business environment which has already seen a fair
vacant roller-shuttered units. The increased supply of share of retailers dropping out. Coupled with the
retail space in recent years, coupled with the recent significant increase in retail space offered in the local
economic slow-down have adversely affected the retail market, Sarawak’s retail market is expecting a general
market, with lower occupancies translating into lower drop in its performance.
asking rentals hovering around an average of RM13 per
square foot. There is a dire need for the struggling malls to innovate,
recreate and reinvent themselves in order to remain
A hybrid retail mall known as Aeroville was completed in relevant.
2019. It houses 2 anchor tenants which are Econsave
Supermarket and Hoi Tin Lau restaurant. The former Ting
& Ting Supermarket space is now occupied by What
About Kuching (WAK) event organizer, a centre for craft
exhibitions, art performance events and lifestyle
statements. Retail complexes currently under construction
are Tropics City Mall at Jalan Song and the Forum at
Jalan Stampin Tengah.
SUPPLY AND RENT OF RETAIL MALLS IN KUCHING

Average Prime Retail Rent (RM per sq. ft.)
10.00 20.00
8.00
15.00
RM per sq. ft.
6.00
10.00
4.00
5.00
2.00
0.00 0.00
2015 2016 2017 2018 2019e 2020f
Abbreviation: RM = Ringgit Malaysia mil. = million, sq. ft. = square feet,
per sq. ft. = per square foot
Aeroville Mall @ Stutong Baru
Source: WTWY Research Source: WTWY Research
58
INDUSTRIAL
INDUSTRIAL
KLANG VALLEY
Growing demand for last-mile deliveries are in line with the expansion of e-commerce. Efficiency and
accessibility will top as the main criteria for logistics players to match the needs between air or sea
ports and end users.
LOOKING BRIGHT Sales growth from e-commerce platforms resulted from

increasing usage, creating opportunities for logistics and
Klang Valley remained as top 3 regions for investment in distribution activities.
Malaysia. From January to September 2019, Klang
Valley attracted RM16.59 billion of approved investments The KLIA Aeropolis Digital Free Trade Zone (DFTZ)
or 28.8% of total approved investments. Foreign interest development is expected be operational by September
constituted RM11.17 billion of the investments. 2020. 1.2 million square feet will provide cargo and
warehouse facilities to host some of the e-commerce
Future industrial supply totalled 2,700 units as reported players and logistics players.
by NAPIC. Semi-detached units consists of 48% or 790
units of the planned supply. Looking forward, Sime Darby Property Bhd, Mitsui & Co
Ltd and Mitsubishi Estate Co Ltd have formed a joint-
Located on a 7.15-hectare site, Area Logistics @ venture - SDMIT Development Sdn Bhd to develop 39
Ampang contributed 1.2 million square feet upon acres of industrial land in Bandar Bukit Raja. Easy access
completion in 4Q 2019. It will be the first 3-storey ramp provided by the upcoming West Coast Expressway (WCE)
up inner-city mega distribution hub, in line with fast will strengthen demand for logistics and other industrial
growing e-commerce needs for last mile delivery. facilities.
E-COMMERCE: ON TRACK Meanwhile, the Ministry of International Trade and

Industry (MITI) has set aside RM43 million to enhance the
The total volume of air cargo handled from 1Q to 3Q existing Industry4WRD programmes.
2019 was 517,000 metric tonnes (1Q – 3Q 2018:
540,000 metric tonnes). Despite the decrease y-o-y, the
air freight volume is expected to increase as e-commerce
expands.
INDUSTRIAL PROPERTY SUPPLY AIR CARGO MOVEMENT IN KLANG VALLEY

1Q 2018 – 2Q 2019
Planned (LHS) Klang Valley Airports International
Incoming Supply (LHS)
Klang Valley Airports Domestic
Existing Supply (RHS)
Overall Malaysia Total
1,200,000
2,000 45,700
45,600 1,000,000
Future Supply (No. of Units)
Cargo Handled by Airports,
1,500
Existing Supply (No. of Units)
45,500 800,000
(Metric Tonnes)
45,400 600,000
1,000
45,300
400,000
500 45,200
200,000
45,100
0
0 45,000
15 16 17 18 18 19
20 20 20 20 Q 20 Q 20
8
3 3
2 01
2 01
2 01
2 01
2 01
2 01
- -
1Q 1Q
1Q
2Q
3Q
4Q
1Q
2Q
Source: NAPIC, CBRE | WTW Research Source: Ministry of Transport (MOT), CBRE | WTW
60
INDUSTRIAL
KLANG VALLEY
OUTLOOK Potential industrial growth along the railway route would

be on the watchlist.
At present, Port Klang’s handles about 12 million TEUs
(Twenty-Foot Equivalent Units) per annum. Westports’ SEREMBAN
extension to create an additional capacity up to 30
million TEUs has been approved by the government Sited to the south of the Klang Valley and close to the
which will boost the container growth and enhance Kuala Lumpur International Airport, the prime industrial
connectivity in Port Klang. areas showed some positive signs. A mixture of local and
foreign players such as Coca-Cola, FGV, Kellogg's,
The government allocation of RM50 million in Budget Mission Foods and Crown Records Management were
2020 for the repair and maintenance of roads to Port noticeable within Enstek Techpark. Ajinomoto also joined
Klang will also improve access. the crowd with the new plant investment. Hot spots also
include Sendayan Techvalley and Nilai.
To improve the movement of cargo between Serendah
and Port Klang, the feasibility study on the proposed Rail
Bypass is expected to kickstart next year.
AREA Logistics @ Ampang

Source: AREA Management Sdn Bhd
61
INDUSTRIAL
PENANG
The encouraging manufacturing investment trend is expected to extend to 2020 and sustain the
industrial property sector. Acquisition, disposal and leasing activities will be prompted by the
continuous new investment and re-investment, ongoing corporate restructuring, fluctuating global
demand and supply, and technology advancement such as Industry 4.0. Prices and rentals are
anticipated to be stable.
ENCOURAGING MANUFACTURING • National Instruments is investing RM170 million to

INVESTMENT • FEDEX Express (FedEx):, RM17.6 milllion Penang
Gateway facility at the New Cargo Complex at
Penang State recorded an encouraging total approved Penang International Airport. Measuring about
manufacturing investments according to the latest 52,000 square feet, the warehouse is the largest
statistics for 1H 2019 released by the Malaysian integrated logistics facility of its kind in Penang and
Investment Development Authority (MIDA), poised for a serves as a major hub in the northern states and is a
strong growth in 2019 compared to 2018. For 1H key gateway for FedEx Asian and Trans-Asian flights.
2019, Penang State recorded the highest foreign It is also the first facility in Malaysia to feature 100%
investment among the states in the country: RM8.71 X-ray scanning for all outbound packages.
billion, representing 35% of Malaysia’s total FDI.
Penang is also the highest state in terms of total Major industrial complexes opened for operations in
domestic and foreign investment, at RM9.21 billion, 2019 include:
surpassing the state’s RM5.78 billion achieved in year
2018. • Taiwanese-owned electronic manufacturing services
(EMS) company, Hotayi Electronic (M) Sdn Bhd has
New manufacturing investment and reinvestment opened a new plant of 350,000 square feet in Batu
sustaining the growth of the Penang industrial property Kawan Industrial Park with investment of RM1
sector, is expected to continue. billion.
Announcements of significant new manufacturing • With a RM600 million investment, AVX

investments into Penang in 2019 include: Manufacturing (M) Sdn Bhd launched a new
manufacturing facility of 250,000 square feet in
• Smith + Nephew - a facility of 250,000 square feet Bayan Lepas Free Industrial Zone Phase 3. In
at Batu Kawan Industrial Park. The company addition to the existing 200,000-square foot facility,
specialises in surgical implants and advance wound the total 450,000 square feet facility will be AVX’s
care products. largest multi-layer ceramic capacitor manufacturing
• National Instruments: RM170 million to expand its facility in the world.
facility at Batu Maung.
APPROVED MANUFACTURING INVESTMENTS IN PENANG (2015 – JAN TO JUNE 2019)
Domestic Investment (RM bil) Foreign Investment (RM bil)

10
8
Investment (RM bil)
0
2015 2016 2017 2018 2Q 2019
Abbreviation: RM = Ringgit Malaysia bil. = billion
Source: Malaysian Investment Development Authority (MIDA), CBRE | WTW Research
62
INDUSTRIAL
PENANG
• VAT Manufacturing Malaysia Sdn Bhd has opened a Axis Real Estate Investment Trust (REIT) entered into a
new manufacturing facility in Batu Kawan Industrial lease agreement with the Penang Development Corp
Park costing RM165 million investment. The facility (PDC) in July 2019 to lease 2.4975 acres of industrial
has been expanded from 60,000 square feet to land at Batu Kawan Industrial Park for the development
240,000 square feet. of a 44,000 square feet single-storey warehouse with
office space. The lease is for 30 years at a total
• Boss Aerosystem Sdn Bhd launched its new facility of consideration of RM3,916,479.60, analysed at RM36
58,000 square feet in Bukit Minyak Industrial Park. per square foot.
American companies based in Penang were also not The warehouse with development cost estimated at
seen returning to the United States. On the contrary, RM11.85 million, would be subleased to Federal
there was more foreign direct investment from the Express Services (M) Sdn Bhd (FedEx) for an initial fixed
United States in 2019 compared to 2018. lease period of 10 years with an option to renew for
further 5 years. The monthly rental for the first 7 years
With the strong existing presence of high value would be RM132,000 calculated at RM3.00 per square
industries and trained workers in Penang, the foot per month. For years 8 to 10, the monthly rental
encouraging manufacturing investment is expected to would be RM145,200 calculated at RM3.30 per square
extend to 2020 and sustain the industrial property foot per month. Axis REIT estimated the initial net yield
sector. to be 9%.
ACTIVE MARKET Axis REIT has also entered into a sale and purchase
agreement with Zoomic Technology (M) Sdn Bhd in July
The Penang industrial property sector was relatively 2019 to acquire an industrial complex in Free Industrial
active with acquisitions, disposals and leasing activities, Zone Phase 4 ,Bayan Lepas Industrial Park, for RM20.5
which included: million.
TOTAL SUPPLY OF INDUSTRIAL UNITS IN PENANG ISLAND
Terraced Semi-D Detached
1,200
1,000
800
No of Units
600
400
200
0
2015 2016 2017 2018 2Q 2019
63
INDUSTRIAL
PENANG
With a floor area of approximately 78,024 square feet, STABLE PRICES AND RENTALS
the industrial complex is on a 2.067-acre site has an
unexpired leasehold tenure of approximately 32 years. It In recent years, the prices and rentals of industrial
is tenanted by Pentax Medical (Penang) Sdn Bhd since properties rose in tandem with the rising development
1st February 2018 at a monthly rental of RM137,322.24, cost. As such, prices and rentals are anticipated to be
which is analysed at RM1.76 per square foot per month stable in near future.
on the floor area.
ALOR SETAR
MGudang Sdn Bhd, a subsidiary of MMAG Holdings Bhd
entered into a conditional sale and purchase agreement Cautious business sentiment continues with pressured
with Dynaciate SPI Sdn Bhd, a subsidiary of Dynaciate rentals. Despite the absence of new projects, there are
Group Bhd, (formerly Tatt Giap Group Bhd) in October signs of development plans on the Kulim International
2019 to acquire an industrial complex in Kawasan Airport (KXP), manufacturing industries and logistics hub
Perusahaan Valdor for RM41 million. With a gross floor in Sidam, Digital Library in Alor Setar and petrochemical
area of 335,371 square feet, the industrial complex is on industrial park in Gurun by the Ministry of Economic
a 12.6 acres site with freehold tenure. The buildings will Affairs. Improvement on infrastructure could be an added
be refurbished to be a regional hub-cum-warehouse for value to attract foreign investments.
the logistics and courier service.
IPOH
The industrial property sector is foreseen to continue to
be active due to the continuous new investment and re- Industrial activities were sustained within established
investment, ongoing corporate restructuring, fluctuating industrial schemes such as Jelapang, Meru, IGB and
global demand and supply, and technology advances Tasek surrounding the North-South Expressway. The
which affect operations i.e. Industry 4.0. There will also market condition is fairly healthy as existing supply is able
be opportunities of sale and leaseback arrangements due to fit the needs of market demand.
to ongoing corporate restructuring.
Ipoh’s industrial market may have potential for foreign
investment and industrial opportunities in long term
should government promotion plans materialise.
TOTAL SUPPLY OF INDUSTRIAL UNITS IN SEBERANG PERAI
Terraced Semi-D Detached

8,000
7,000
6,000
No of Units
5,000
4,000
3,000
2,000
1,000
0
2015 2016 2017 2018 2Q 2019
64
INDUSTRIAL
ISKANDAR MALAYSIA
The industrial market in the region remains optimistic supported by the continuously inflow of
approved investments and active transaction activities.
APPROVED INVESTMENT REMAIN UPBEAT TRANSACTION ACTIVITY STAYS ACTIVE
In first half of 2019, Johor fell behind Penang, Kedah In 2019, transaction activity of industrial units remained
and Selangor, with total approved investment of about active. Transaction volume increased 33% to 412 units in
RM4 billion. Foreign direct investment was recorded at 1Q-3Q 2019 from 310 units in the corresponding
RM1.7 billion only. The remaining RM2.3 billion was period of 2018. The transaction value recorded at
contributed by domestic investments, which ranked Johor RM1,007 million in 1Q-3Q 2019, viz. rose by 28% as
the first among all states. compared to RM784 million in 1Q-3Q 2018.
MORE CLUSTER AND SEMI-DETACHED Semi-detached factories were actively transacted as both
FACTORIES transaction volume and value showed a growth of 33%
and 42% respectively, at 185 units and RM412 million in
The total supply is estimated at 12,600 units as of 2019. the first nine months of 2019.
Iskandar Malaysia (IM) saw the completions of Eco
Business Park 2 (Phase 1), Taman Perindustrian AVERAGE RENTAL REMAINS STABLE
Cemerlang (Phase 1 & 2) and De Hoff Park which totaled
248 cluster and semi-detached factories. Overall, the rental for industrial properties in the region
remains stable, generally in the range of RM1.00 to
3 industrial parks launched new phases, viz. Eco Business RM1.80 per square foot for new industrial parks while the
Park (Phase 2), 5F Factory and Taman Perindustrian rentals for factories located in old industrial areas range
Cemerlang (Phase 4), mainly offering cluster and semi- from RM0.80 to RM1.40 per square foot.
detached factories which are the preferred choice for
small-and-medium enterprise (SME) groups in the region.
INDUSTRIAL PROPERTY SUPPLY IN ISKANDAR PERFORMANCE OF INDUSTRIAL SECTOR IN

MALAYSIA ISKANDAR MALAYSIA
Terraced Semi-Detached Transaction Volu me
Detached Average Rental Transaction Value
14,000 1.45
500 1,400
12,000 1.40
1.35 1,200
Average Rental (RM per sq. ft.)
400
10,000
1,000
1.30
Value (RM mil)
8,000
No of Units
1.25 300 800

6,000 1.20
200 600
1.15
4,000 400
1.10 100
2,000 1.05 200
0 1.00 0 0
2015 2016 2017 2018 2019e 2015 2016 2017 2018 9M2018 9M2019
Abbreviation: RM = Ringgit Malaysia, per sq. ft. = per square foot Abbreviation: RM = Ringgit Malaysia, mil = million
Note: Data for the full year of 2019 is based on estimation Note: Data for the full year of 2019 is based on estimation
65
INDUSTRIAL
ISKANDAR MALAYSIA
The current trend of new industrial schemes in Iskandar To date, the company has completed around 200
Malaysia have evolved into managed developments industrial projects for multinational and local industrial
featuring high speed broadband, gated and guarded players from various sectors.
security system, green designs and others. They are
mostly located near to ports and airport like Senai, Pasir Marine service provider KA Petra Sdn Bhd was planning
Gudang and Iskandar Puteri. Older schemes are mainly to cooperate with Hong Kong based port operator
located approximately 20-30 kilometres from ports and Hutchison Port Holdings Ltd to develop the world’s largest
airport like Tampoi, Tebrau, Plentong and Masai Ship-to-Ship (STS) transfer hub which will be located off
localities. Port of Tanjung Pelepas (PTP). Upon completion, the
vessel capacity will be increased from 9 to 30 vessels to
BITTERSWEET INDUSTRIAL MARKET handle nine million tonnes of petroleum products and
liquefied natural gas.
Government linked company Bio-XCell Sdn Bhd entered
into receivership and left 80 acres of land forming the PTP is planning to double up the existing Free Trade Zone
Bio-XCell park in SiLC up for sale by creditors. The of 350 acres in which almost 95% of the existing land is
establishment of the company in 2009 was targeted to occupied. The planned expansion would help the existing
develop a biotechnology park. However, the company companies to expand their operations as well as attract
accumulated losses of more than RM200 million over the new comers. In addition, PTP is also planning to expand
past 10 years and was unable to meet its financial its berthing terminals to accommodate the forecasted
obligations. increase in traffic.
India’s biopharmaceutical company Biocon has offered to BATU PAHAT

buy the central utilities facility and an 8-acre parcel within
Bio-XCell park for RM25 million. Solution Group Berhad Domestic players continue as core demand venturing into
entered into sale and purchase agreement with Bio-XCell the furniture and textile industries. The driving factor also
for a 7-acre parcel erected with a partially completed comes from the availability of workers from a growing
Verdepalm Plant together with the machinery and population of about 400,000 in the district. Average rent
equipment for a total of RM25 million. per square foot was maintained below RM1.
Axis REIT completed the acquisition of 4 industrial

properties located at Nusajaya Tech Park in Iskandar MELAKA
Puteri. These 4 factories have a total lettable area of
147,000 square feet, and were transacted at RM55.8 Ayer Keroh remained to serve for F&B activities while
million. Krubong was mainly for warehousing activities.
Pharmaceutical and steel industries are noticeable in
Axis REIT also proposed to acquire a single storey Cheng, E&E in Batu Berendam FTZ, wood base in Bukit
warehouse annexed with a 3-storey office building with Rambai and automotive in Pegoh. On the other hand,
net lettable area of 223,000 square feet in the Port of Tanjung Minyak serves as Smart Industrial Centre.
Tanjung Pelepas for RM65 million. Acquisitions of Average rents in Melaka will be slightly higher with lower
industrial premises by REITs such as Axis REIT indicated yields as compared to Batu Pahat.
optimistic outlook of the industrial market of Iskandar
Malaysia.
Industrial space solutions provider AME Elite Consortium

Berhad which is based in Iskandar Malaysia, was
successfully listed on the Main Market of Bursa Malaysia
Securities. The company is principally involved in the
construction of large manufacturing plants and industrial
properties, development of industrial parks, sale and
lease of factories, rental and management of workers’
dormitories as well as provision of engineering works and
services.
66
INDUSTRIAL
EAST COAST
The best performing sector in the East Coast.
KUANTAN
KUALA TERENGGANU
Demand for industrial land less than 3 acres was active in
preferred industrial estates such as Semambu Industrial With a stable rent and yield, Kuala Terengganu offers the
Estate, Batu 3 and Indera Mahkota. potential for investment opportunities. Chinese integrated
construction company Pacific Construction Group Ltd
The Gebeng Industrial Area also offers land for local and (CPCG) has planned for long term investment, initiating a
foreign demand to set up new plants or warehouses, RM3 billion investment including industrial park, free zone
backed by competitive land price, availability of skilled and affordable housing.
labour and amenities offered by the State Government.
OUTLOOK
Notable transaction activities were the acquisition of
Kinsteel Berhad & Harvard Vision Sdn Bhd by Top Gloss Kuantan showed the potential of upward market direction
and Api Trengganu Sdn Bhd respectively consisting lands, with active transactions and demand from foreign
plants machinery and buildings. investments whilst Kota Bharu and Kuala Terengganu
share similar trends in rents and yields. Reviving of the
Panasonic (M) Sdn Bhd was sold to SP Leveration Sdn East Coast Rail Link (ECRL) may open up more
Bhd which represented a new chapter in the marketing opportunities in the long term.
direction of the electrical product firm.
KOTA BHARU
Manufacturing activities contribute less than 10% of GDP.

Industrial developments remained docile without
significant movement. Industrial activities mainly cater for
the domestic market.
67
INDUSTRIAL
SABAH
KOTA KINABALU: Noticeable activity in the secondary market but quiet in terms of new launchings.
MORE ACTIVE SUB-SALES

There were no new launches of light industrial
Total volume and value of sub-sale transactions developments in 2019. Ongoing light industrial
encompassing vacant industrial plots, terraced, semi- projects are mainly located in the northern sector of
detached and detached factories/warehouses within Kota Kota Kinabalu, along Jalan Tuaran Bypass and Jalan
Kinabalu-Penampang-Putatan for the period of January- Tuaran and southern township of Putatan.
September 2019 increased by some 39% and 89%, y-o-
y, respectively. LAHAD DATU
Terraced light industrial buildings make up about 47% of Supply of warehousing land can be easily met in the Palm
the transaction volume whilst semi-detached and Oil Industrial Cluster (POIC) Lahad Datu. The
detached factories/warehouses accounted for some 35% commissioning of POIC Container Terminal will provide
combined. About 47% of the total value transacted was an impetus to the lackluster economy in Lahad Datu and
from detached factories. reduce logistic costs. The port terminal is expected to
have capacity of 250,000 TEUs (twenty-foot equivalent
unit) annually, catering for dry and liquid bulk cargo for
INDUSTRIAL TRANSACTIONS – KOTA East Coast of Sabah.
KINABALU, PENAMPANG & PUTATAN
TAWAU
COMPARISON TOTAL TOTAL
PERIOD VOLUME VALUE
Most of the demand in Tawau comes from light
Jan – Sep 2018 84 RM111.11 mil engineering works, storage and SME soft manufacturing
industries focusing on domestic consumption.
Jan – Sep 2019 117 RM209.62 mil
% Change y-o-y 39.3% 88.7% OVERALL

Source: NAPIC.
Kota Kinabalu is the main distribution hub for Sabah and
industrial lands and buildings with good accessibility and
Analysed value per transaction for terraced and semi- close to centres of activities will continue to be in
detached factories for January-September 2019 is demand. Demand for industrial properties mainly comes
about RM706,000 and RM1,645,000, which is an from SMEs with requirements for factories, workshops,
increase of 2% and 9% respectively, y-o-y. showrooms and warehouses.
Palm Oil Industrial Cluster (POIC) Container Terminal, Lahad Datu

68
INDUSTRIAL
SARAWAK
KUCHING: The industrial sector was generally stable for 2019, with few completions.
PASSIVE BUT STABLE MIRI AND BINTULU
The industrial sector in Kuching, although rather passive, The improving oil and gas industry in Miri continues to
remains stable. Only one private industrial project was drive the market, sustained by large corporations. Heavy
completed in 2019, namely, Vista Industrial Park (V.I.P.) industries have shifted their interest to Bintulu which may
by Hock Seng Lee Berhad comprising 56 two-storey semi- become an Industrial City by 2025. As an industrial
detached units and only one industrial project was town, demand for industrial properties will be better with
launched in 2019, offering 26 units at Jalan Batu Kawa, access to the deep-sea port in Bintulu and Samalaju.
developed by M/s Lee Onn and expected to be Notable major players such as Sakura Ferroalloy and
completed next year. OCIM continued to expand their manufacturing capacity
in Samalaju Industrial Park.
There continues to be interest in the secondary market
especially for units in established industrial areas. There is SIBU
also increasing demand for showroom types as indicated
by the increasing conversion of detached lots along main In Sibu, light industrial services, ship-building and ship
roads for such purpose. repair drives most of the the demand for industrial
properties. Asking prices for industrial properties in
Semi-detached units and warehouses remain popular outskirts areas such as Sibu Jaya has increased. Land
with market prices ranging from RM600,000 to over RM1 acquisition for Rantau Panjang area was also confirmed
million. Occupancies and take up rates were stable and for the proposed Phase II for shipbuilding and related
remain unchanged for 2019, whilst rentals range from activities, reflecting the need and demand.
RM1.20 to RM1.50 per square foot for semi-detached
units. OUTLOOK
In the long run, there is good potential for light industrial The industrial sector is mixed across the major towns in
units in Kuching in areas with good road networks and Sarawak with Kuching mostly expanding with SMES, Sibu
frontages with the increasing presence of SMEs who will on shipbuilding whilst heavy industries are expanding in
demand space for workshops, showrooms and the Northern towns of Miri and Bintulu which has been
storage/warehousing. earmarked as Sarawak’s Industrial City. The future for the
industrial sector remains optimistic with good growth
potential.
SUPPLY OF INDUSTRIAL UNITS IN KUCHING

Terraced
Detached
Semi-D
Average Rent Location (RM per sq. ft.)
3,000 1.40
1.20
Average Rent Location (RM per sq. ft.)
2,500
1.00
2,000
0.80
No of Units
1,500
0.60
1,000
0.40
500 0.20
0 0.00
2015 2016 2017 2018 2019e 2020f
Abbreviation: RM = Ringgit Malaysia, per sq. ft. = per square foot
Note: Data for the full year of 2019 is based on estimation V.I.P Industrial Park @ Muara Tabuan
Source: NAPIC, WTWY Research Source: WTWY Research
69
HOTEL
HOTEL
KLANG VALLEY
Visit Malaysia 2020 will increase tourist arrivals, partly fueled by global issues steering tourists away
from the other traditional destinations.
GROWTH IN TOURISM Upscale hotels recorded the highest AOR at 84%,

followed by Midscale (82%) and Luxury at 75%. Higher
Tourist arrivals recorded positive growth of 4.9% y-o-y AOR during the review period was due to the Raya
(YTD January to June) to 13.4 million, mainly contributed festival with a lot of MICE activities during the period. The
by traditional markets such as Singapore (3.6%), Thailand overall average room rate (ARR) was stable at RM260, a
(4.2%), Indonesia (15.0%) and Vietnam (12.1%). marginal increase.
There were also double digit gains from leisure-oriented LOWER INVESTMENT IN LUXURY SERVICES
markets such as South Korea (14.6%) and India (13.5%),
and also from the Middle East during the Ramadan After the active year for the Luxury segment in 2018, the
period. However, markets such as Brunei (-12.0%), market slowed down with developers and investors
Taiwan (-2.8%) and several European countries recorded shifting interest to the midscale and upscale segments.
a negative. The trend of lower investment cost with a bit of luxury,
rebranding and improved range of services have made
Malaysia also recorded positive growth in tourist midscale hotels better hotel investments in the slow
expenditure: China (22.5%) and Indonesia (17.5%). market driven by stronger demand by business and
However, Singapore tourist expenditure dropped by - shopping travelers.
13.9%. In terms of expenditure per capita, Saudi Arabia
topped the chart for YTD January to June 2019 , However, the entry of new luxury hotel brands such as
followed by United Kingdom, Canada, China and United Park Hyatt, Kempinski and Fairmount is still ahead which
States of America. Travelers are spending much more on will reinforce KL’s position in the international tourism
shopping (increase 6.2% to RM14.72 billion) but market to attract high-yield tourists.
spending on accommodation at RM9.71 billion dropped
-2.7% y-o-y.
Average room occupancy for 3Q 2019 was 81% for KL,

an increase from the previous year (76%), while outside
KL, AOR dropped to 64% (3Q2018:69%). KV recorded
AOR 76% in 3Q 2019.
TOURIST ARRIVALS AND RECEIPTS HOTEL PERFORMANCE 2019

KL Room Rate OKL Room Rate
International Tourist Arrival, mil International Tourist Receipt, RM bil KL Occ Rate OKL Occ Rate
450 90
30.0 90.0
400 80
80.0
25.0 350 70
70.0
Total Receipts (RM bil)
300 60
Tourist Arrival (mil)
20.0 60.0
AOR (%)
250 50
ARR (RM)
50.0
15.0 200 40
40.0
10.0 30.0 150 30
20.0 100 20
5.0
10.0 50 10
- 0.0 0 0
2015
2016
2017
2018
YTD Jan-June
YTD Jan-June
2015 2016 2017 2018 3Q 2018 3Q 2019

2018
2019
Abbreviation: KL = Kuala Lumpur, OKL= Outside Kuala Lumpur,

Abbreviation: YTD = Year-to-date, mil. = million, bil = billion Occ = Occupancy, ARR = Average Room Rate, AOR = Average Occupancy Rate
Source: CBRE | WTW Research, 4Q 2019.
Source: CBRE | WTW, 4Q 2019.
71
HOTEL
KLANG VALLEY
MIDSCALE IN THE SPOTLIGHT Impiana Hotels and Resorts comprising of Impiana

Pangkor, Astaka Mekar (Impiana KLCC), Intra Magnum,
As of 2019, the cumulative supply stood at 59,674 Impiana Cherating and Impiana Ipoh were sold for
rooms (209 hotels, 70% in KL, 30% outside KL). An RM425.9 million to Bio Osmo Berhad.
estimated 1,918 rooms comprising midscale and upscale
types are expected to be completed during 2H 2019. Malaysia was the most visited OIC destination for the 8th
CitizenM Hotel and EQ Hotel were the 2 new hotel consecutive year and KL was among the top 6 global
openings this year, adding a combined total of 638 destination cities with 13.79 million visitors (average stay
rooms. is 5.5 nights).
By 2023, 35 more hotels with 13,827 rooms are The multi-cultural, natural landscape, halal market,
expected to enter the market. The majority of upcoming variety of cuisine are advantages that attract tourists to
supply will be upscale hotels. Malaysia. Increased airline services, growth of domestic
tourism and continuous support by the Government are
In 2019 Royale Chulan Bukit Bintang with 400 rooms also key factors for tourism success. Upgrading tourism
was sold for RM197 million or about RM492,500 per facilities i.e. MICE, flight connectivity, transportation and
room to a Singapore hotel group. Tune Hotels in Chow promotions need to be continuous to sustain the tourism
Kit was sold for RM31 million or about RM144,000 per demand growth.
room. The hotels will be rebranded into two boutique
hotels namely, The Ormond and Momo’s.
KLANG VALLEY HOTEL SUPPLY
OKL SA UP LUX MID ECON KL KV
100,000
90,000
80,000
70,000
No. of Rooms
60,000
50,000
40,000
30,000
20,000
10,000
0
2015 2016 2017 2018 2019e 2020f 2021f 2022f 2023f
Abbreviation: ECON = Economy, MID = Midscale, LUX = Luxury, UP = Upscale, SA

= Serviced Apartment, KL = Kuala Lumpur, KV = Klang Valley
72
HOTEL
KLANG VALLEY
SEREMBAN: PORT DICKSON REACTIVATED VISIT MALAYSIA 2020
Newly completed Lexis Hibiscus and D’Wharf Hotel and Overall, the demand for hotel rooms is expected to
under construction Splash Park have rejuvenated Port increase supported by the continuous promotion
Dickson as a popular vacation destination in Negeri activities, expansion of MICE and medical tourism and
Sembilan and underline the growth prospects of the Visit Malaysia 2020 (VMY2020). Overall tourist arrivals
tourism industry and hotel market in Negeri Sembilan. may touch 28.1 million with total spending of RM92.2
billion for year 2019.
The overall occupancy rate remained stable in 2019 and
will remain unchanged in 2020. However, the recent The entry of more international brand hotels and
announcement of Hard Rock Hotel opening in Port incoming iconic projects will amplify the charm of KL as a
Dickson could be a major boost to the hotel market in tourist destination to host business and other major
the area. events during VMY2020.
SELECTED FUTURE SUPPLY BY 2020f – 2023f
ESTIMATED
DEVELOPMENT LOCALITY NO. OF
ROOMS
2020
DoubleTree by Hilton
Shah Alam 300
@ I-City
Conrad Kuala Lumpur Jalan Sultan

544
Ismail
Fairfield Inn by Marriot Jalan

188
Pahang
2021
Kempinski @ 8 Conlay Bukit

260
Bintang
Park Hyatt @ PNB 118 PNB 118 232
Canopy by Hilton @
BBCC 478
BBCC
Fairmont Hotel KLCC 750
2022
Mercure Kuala Lumpur KL Trion 240
2023
Jumeirah @ Oxley
190
Tower
Jalan
Ampang
So Sofitel @ Oxley
207
Tower
Abbreviation: BBCC = Bukit Bintang City Centre, KLCC = Kuala Lumpur City Centre EQ Hotel
Source: Global Destinations Cities Index 2018, Mastercard-CrescentRating Global Source: CBRE | WTW Research.
Muslim Travel Index (GMTI) 2019, CBRE | WTW.
73
HOTEL
PENANG
The hotel property sector is anticipated to be sustained by the prevailing vibrant tourism industry.
However, new entrants and the considerable upcoming hotel rooms will exert keen competition
among hoteliers. Purpose-built hotels also continue to face competition from shophouse boutique
hotels and alternative accommodation such as serviced residences/apartments and SOHO.
Occupancy and room rates would be under pressure and are projected to remain moderate.
SUSTAINED BY VIBRANT TOURISM INDUSTRY Moreover, the weakened Malaysian currency has to a
certain extent deterred Malaysians from travelling abroad
The Penang tourism industry in 2019 has continued thus fueling domestic tourism. The growing medical
receiving international recognition, which augurs well for tourism has also been a contributor to the vibrant tourism
the tourism industry. Penang has been listed as one of the industry. The tourist arrivals will further increase by the
top 10 great value beach destinations in the world. upcoming expansion and upgrading of Penang airport
Online portal International Living listed Penang as 8th, and the Swettenham Pier Cruise Terminal. Hence, the
among 21 other beach destinations, to visit or live in vibrant tourism industry is anticipated to continue
which is “pocket-friendly” by global standards. Penang supporting the Penang hotel property sector.
has also been listed as one of 16 best destinations to visit
for the ultimate Asia experience by CNN Travel. ADDITIONAL HOTEL ROOMS ENTERED THE
MARKET
Tourist arrivals to Penang is expected to steadily grow due
to increased connectivity through direct flights and An additional 737 hotel rooms from 4 hotels entered the
enhanced cruise routes. In 2019, Penang International market in 2019. Two of the hotels are in Tanjung
Airport welcomed a new carrier – Qingdao Airlines. Tokong, Penang Island: The Jazz Hotel (255 rooms) by
Qingdao Airlines is the 16th international carrier to Penang based Vouk Hotel Management (VHM) Group
operate in Penang with flights from Penang to Quanzhou and the 4-star Hompton By The Beach (240 rooms) and
and Changsha. 2 other newly-opened hotels in the inner city of
Georgetown: The Prestige Hotel (162 rooms) and
Victoria Garden Hotel (80 rooms).
HOTELS AOR (SEPTEMBER 2018 to AUGUST 2019)

Average Occupancy Rate for Beach Hotels (%) Average Occupancy Rate for City Hotels (%)
70
65
AOR (%)
60
55
50
Sep'18 Oct'18 Nov'18 Dec'18 Jan'19 Feb'19 Mar'19 Apr'19 May'19 Jun'19 Jul'19 Aug'19
Abbreviation: AOR = Average Occupancy Rate

Source: Malaysian Association of Hotels (Penang Chapter), Penang Institute, , CBRE | WTW Research.
74
HOTEL
PENANG
In terms of new developments, a new high-end niche UPCOMING MAJOR HOTEL DEVELOPMENTS
hotel is designated for development at the vicinity of IN PENANG
Miami Beach, Batu Ferringhi. The State Government has
issued a Request for Proposal (RFP) to develop a 4.2- DEVELOPMENT NO. OF EXPECTED
ROOMS YEAR OF
acres site which is currently identified as a Coastal Resort OPENING
and Spa, which is open to local and international
bidders, to transform into a world class spa resort. PENANG ISLAND
Amari @ Setia SPICE 453 2020

With new entrants, competition would intensify among
hotels. More efforts are required in order to stay Courtyard by Marriott @ 208 2020
competitive in the market. Tropicana 218 Macalister
Angsana Teluk Bahang 103 2020

PRESSURE ON OCCUPANCY/ROOM RATES
OZO Hotel along Jalan Agryll 132 2020
The keen competition from new entrants and the
considerable upcoming hotel rooms, are expected to put Proposed Hotel @ Sunshine 320 2021
pressure on hotel occupancy and room rates. Purpose- Tower
built hotels have also been facing competition from JW Marriott at Persiaran Gurney 313 2022
shophouse boutique hotels which operate mostly in
refurbished pre-war shophouses within the inner city of Island Medical City 440 2023
Georgetown. Online Services Providers such as Airbnb,
SEBERANG PERAI
which offer accommodation in serviced residences /
apartments, and SOHO, provide alternative Holiday Inn & Suites 288 2020
accommodation which compete with purpose-built hotels.
As such, the performance of hotels in Penang is projected Proposed 4 to 5 star hotel 364 2022
along Jalan Bagan Luar,
to remain moderate.
Butterworth
In comparison, average occupancy rates for beach hotels Aloft @ Aspen Vision Batu 308 2023
in Penang were generally higher, ranging between 56% Kawan
and 65% compared to 52% and 64% achieved by city Source: NAPIC, CBRE | WTW Research.
hotels. Average room rates for beach hotels generally
range between RM361 and RM522 per day while city
hotels averaged room rates between RM213 and RM234
per day.
HOTELS SUPPLY IN PENANG
Island - No. of Hotels Mainland - No. of Hotels

Island - No.of Rooms Mainland - No.of Rooms
50 12000
45
40 10000
35 8000
No of Hotels
No of Rooms
30
25 6000
20
15 4000
10 2000
5
0 0
2015 2016 2017 2018 2019
75
HOTEL
PENANG
ALOR SETAR: STRONG ISLAND ATTRACTION IPOH: HERITAGE AND MICE
Langkawi remains the nucleus of Kedah’s tourism both The introduction of tourist buses within the heritage site in
domestic and international. With the advantages of an Ipoh is one example of the rising pace of Ipoh’s tourism
international airport, Langkawi manage to attract sector. The new Ipoh Convention Centre (ICC) is
300,000 visitors per month whereby the end of the year anticipating increased MICE events in Ipoh which could
is the peak season in Langkawi due to winter in the boost hotel occupancy.
northern hemisphere. Due to popularity of the island,
Langkawi’s growth prospects remain sustainable. No new hotels opened in 2019 and therefore there may
be investment opportunities. However, homestays and
Overall hotel occupancy rates remained stable although Airbnb are increasing pressure on the existing hotels in
increased competition from Airbnb which provides Ipoh. The hotel sector in Ipoh is expected to remain
cheaper and competitive rates is gaining market share. stable in 2020 and experience gradual growth in the
long-term. The average room rate (ARR) and average
In terms of supply, established hotel groups remain the occupancy rates for Ipoh is foreseen to be same in 2020.
main operators in Langkawi i.e Four Season Resort,
Tanjung Rhu Resort, The Danna, The Westin, The St Regis OUTLOOK
and Vivanta-By Taj Pulau Rebak. The Dash Hotel and The
Aloft are the newest hotels which started operations in Tourism activity is prominent and active in this region
November 2018. of Malaysia due to island attractions and heritage
sites. Tourism performance has been consistent and
As a tourism hotspot in Malaysia, the Langkawi hotel positive. However, competition from Airbnb and
market is expected to remain stable in 2019 and near homestays will increase challenges to existing and
future. Average room rates were also increasing slightly in new hotels.
the past years giving certainty, stability and high and
consistent yields.
76
HOTEL
ISKANDAR MALAYSIA
The upcoming programs such as Visit Malaysia Year, Visit Johor Year and SUKMA Games in 2020
would augur well for the hospitality industry of Iskandar Malaysia.
JOHOR: ONE OF THE TOP STATES VISITED The hospitality sector in Iskandar Malaysia is expected to
be more competitive with a total of 12 hotel projects with
Johor continued to be one of the top states visited for roughly 3,200 guest rooms currently in the pipeline.
domestic tourists in 2018, viz. ranked as second. The These 12 upcoming hotels will complete from 2020 to
number of domestic tourists was 7.78 million in 2018. 2024.
According to Johor Tourism Committee chairman, Johor
registered total tourist arrivals of 15.84 million in 2018 MODERATE ROOM AND OCCUPANCY RATES
and was aiming to attract at least 16.6 million visitors by
end of 2019. With the SUKMA Games to be hosted by The average room rate for upscale hotels in Iskandar
Johor and Visit Johor Year, tourist arrivals in 2020 is Malaysia has generally moderated at RM290 per room
predicted at 17.4 million. per day while the average occupancy rate remained
stable at 75%. Both room and occupancy rates are
As of 2019, the number of hotels in Iskandar Malaysia projected to stay stable in the short term.
was 37 hotels with a total of 10,400 guest rooms. A new
hotel opened in 2019, viz. Capri by Fraser Johor Bahru However, upon full completion of the upcoming hotels, it
which offers 316 guest rooms. is expected to bring additional pressure to both room and
occupancy rates. With the incursion of serviced
In 2019, four (4) new hotels officially announced their apartments facilitated by online booking agents, hotels in
entry into the region, viz. Hyatt Place Johor Bahru, the region have to provide competitive room rates in
Novotel Johor Bahru, Kencana Hillmark Hotel and One order to preserve their market share, and this will
15 Marina Puteri Harbour. indirectly cap the growth of room rates.
AOR & ARR OF UPSCALE HOTELS IN ISKANDAR

HOTELS SUPPLY IN ISKANDAR MALAYSIA MALAYSIA
No. of Rooms No. of Hotels Average Room Rate

Average Occupancy Rate
12,000 40 350 100%
35 300
10,000 80%
30 250
Occupancy Rate (%)
8,000
Room Rates (RM)
25 60%
200
No of Rooms
No of Hotels
6,000 20
150 40%
15
4,000
100
10
20%
2,000 50
5
0 0 0 0%
2015 2016 2017 2018 2019e 2015 2016 2017 2018 2019e
Note: Data for the full year of 2019 is based on estimation Note: Data for the full year of 2019 is based on estimation
Source: CBRE | WTW Research Source: Horwath HTL, STR, CBRE | WTW, 4Q 2019.
77
HOTEL
ISKANDAR MALAYSIA
CATALYST TO BOOST TOURISM MELAKA: VISIT MELAKA 2019
Iskandar Malaysia will welcome Visit Malaysia 2020, Visit Tourist arrivals are increasing with 2018 recording more
Johor Year and Sukan Malaysia (SUKMA) Games in than 17 million visitors and increasing year by year. 2019
2020. With these programs and activities, hotels in the has been set as Visit Melaka Year.
region are expected to reap the benefits.
Tourist arrivals in Melaka should remain on the uptrend
In 2019, the Pinewood Group pulled out of Iskandar in 2019 and beyond. The opening of Encore Malacca
Malaysia, ending the 10 years partnership with its backers and the Riviera at Pulau Melaka in July and August
in Malaysia. In addition, due to lack of visitors, both respectively should be new tourism pulling factors and
Thomas Town and Sanrio’s Hello Kitty theme parks in subsequently, sustain the hotel market in Melaka.
Puteri Harbour closed down in December 2019.
Meanwhile, competition is building up in Melaka. Plenty
The hospitality market in Iskandar Malaysia was of new hotels are entering the market amidst increasing
dampened with the closure of these parks but major introduction of serviced apartments while competition
infrastructure projects (such as RTS) and new commercial from Airbnb is increasing. Nonetheless, overall demand
or leisure developments will support the healthy and supply shall remain balanced in view of the rising
performance of the hospitality industry. number of tourist arrivals in Melaka.
BATU PAHAT OUTLOOK
Purpose-built hotels in Batu Pahat cater mainly to Tourism activity is prominent in this part of Malaysia, with
government servants and the local people. As the strong the exception of Batu Pahat, and tourism performance in
competition from homestays and budget hotels these cities have been consistent and positive.
suppressed the market in recent years, the hotel sector is Competition is seen to be intensifying but overall, tourism
expected to remain stable with no significant should continue to be expanding.
developments.
TOURIST ARRIVALS & TOURIST RECEIPT (2015 –

2018) IN MELAKA
YEAR AVG TOURIST TOURIST RM

LENGTH ARRIVALS RECEIPTS SPENT
OF STAY (MILLIONS) (RM’000) /DAY
2015 2.18 15.74 16,759.75 488.53
2016 2.16 16.28 18,289.49 520.04
2017 2.25 16.79 19,651.04 445.90
2018 2.46 17.02 20,979.52 501.07
Abbreviation: AVG = average

Source: Melaka Tourism Board, CBRE | WTW Research
Capri by Fraser
78
HOTEL
EAST COAST
Increased visitor arrivals will be the Positive Drive for the hotel and tourism-related sectors.
KUANTAN: DOMESTIC TOURISTS’ FAVOURITE KUALA TERENGGANU: PROACTIVE

INITIATIVES BOOSTED TOURISM
Tourist arrivals to Pahang improved by 15.6% y-o-y to
14,827,961 in 2017, of which Kuantan had its share of The main highlights for tourism in Terengganu for
16.4% (or 2,430,995 arrivals), comprising mainly 2017 are the commencement of Tasik Kenyir Duty
domestic tourists. The key sources of international tourists Free Zone, the hosting of Kenyir Bird and Nature
has been and is expected to continue to be from Quest and Terengganu International Eco and Marine
Singapore, China and Indonesia. Tourism Conference (TEMCO).
Blessed by its dense forest and hills, tourism in the state The constant flow of local and international tourists
of Pahang is oriented on nature and ecotourism. Among into Terengganu will persist into the future with these
the tourism spots are Genting Highlands, Cameron developments.
Highlands, Raub, Bentong, Taman Negara and Kuantan
(Cherating).
Kuantan as the capital city of Pahang currently has 118

hotels with a total of 7,135 rooms. A healthy jump of
22.7% in the average occupancy rate for hotels in
Kuantan was observed.
KOTA BHARU: EMERGENCE OF SERVICED

APARTMENTS
Hotels in Kota Bharu have been facing challenges from

serviced apartments as well as the passive tourism sector.
However, the overall occupancy rate of hotels remained
stable over the years and have given consistent yield
returns for hotel investments. Going forward, the
Kelantan Structure Plan 2040 shall have significant
impact on the tourism sector in Kota Bharu.
Al-Waqf @ Tunjong, Kota Bharu

79
HOTEL
SABAH
KOTA KINABALU: Growth in visitor arrivals to drive the tourism-related and hospitality sectors, with
several major hotels announced in 2019. However, the rise of commercial suite developments
marketed through Airbnb will contribute to a more competitive hotel sector.
OVERALL UPTREND IN VISITOR ARRIVALS Arrivals from long-haul markets like Europe totalling
59,506 in January-October 2019, (y-o-y increase of
Visitor arrivals to Sabah continued on an uptrend in 6.3%) still make up an important niche segment in
2019. January - October 2019 recorded a y-o-y growth Sabah’s tourism sector.
of 8.9% with 3.4 million visitors. Malaysian arrivals made Sabah Budget 2020 highlighted that the Ministry of
up 64% of total arrivals whilst Northeast Asia formed the Tourism, Culture and Environment will further expand the
largest segment of international visitors (74% of tourism sector by focusing on India and Europe.
international arrivals or 26% of total arrivals) given the
Sabah is within relatively short flight times from major As at early December 2019, there were 212 direct
regional Asian cities. international weekly scheduled flights to Sabah, of which
197 are to Kota Kinabalu and 15 to Tawau and
Consistent with previous years, China formed the largest Sandakan. Royal Brunei had commenced direct flights
single country arrivals with 520,974 arrivals or 43% of from Brunei Darussalem to Sandakan and Tawau in
international arrivals followed by South Korea at 26% October and November 2019, respectively.
with 320,450 arrivals. Visitor arrivals from China showed
moderated growth of 3.1% compared to the double-digit The hotel occupancy rate in Kota Kinabalu for nine
growth in 2017-2018. South Korean arrivals was higher months of 2019 encompassing all hotels was about
by 17.9%, compared to the corresponding period in 72.7%.
2017-2018.
Site of the upcoming Club Med Borneo Kota Kinabalu Resort in Kuala Penyu, Sabah
Source: WTWS Research.
80
HOTEL
SABAH
NEW HOTEL DEVELOPMENTS

There is however, scope for international branded,
Hotels Major new hotel developments in Kota Kinabalu upmarket 5-star hotels/beach resorts, given the present
and outskirts as announced in 2019 include the limited supply.
following:
The State government has targeted for 4.18 million visitor
• Club Med Borneo Kota Kinabalu in Kampung Tanjung arrivals in 2020 in line with the Visit Malaysia Year 2020
Aru, District of Kuala Penyu. The 400-room, all- campaign. Under the Sabah Budget 2020, RM237.61
inclusive beach resort has a scheduled completion in million has been granted for various tourism initiatives.
late 2022. The resort will form part of the company’s
5 Trident Exclusive Collection and will be the first SANDAKAN: TOURISM POTENTIAL
Building Research Establishment Environmental
Assessment Method (BREEAM)-certified and The hotel industry remained stable, dominated by budget
sustainably-built beach resort in the Asia-Pacific for hotels mostly located outside the city centre.
Club Med. BREEAM is an internationally recognised
method of assessing, rating and certifying the There will be potential for tourism growth in Sandakan
sustainability of buildings. with the commencement of direct flights from Bandar Seri
Begawan, proposed international flights linking Sandakan
• The Hyatt Centric Kota Kinabalu, comprising 220 and Tawau to China, South Korea and other ASEAN
rooms on the site of Wisma Gek Poh office building in countries by Airasia in January-February 2020, and
Kota Kinbalu CBD. The Kengo Kuma- designed hotel expansion of Sandakan Airport. Sandakan is also the
is Hap Seng Consolidated Berhad’s first foray into the gateway to Borneo’s wildlife, through concerted
hospitality sector and will also be the first Hyatt Centric government promotion.
hotel in Malaysia. It is expected to open in 2021.
TAWAU: ISLAND RESORT OF SEMPORNA
• Sheraton Kota Kinabalu Hotel. The 345-room, 5-star
hotel will be sited in Kota Kinabalu CBD near Asia Tawau’s performance in the hotel sector in 2019
City and Centre Point Sabah. continued to remain soft as reflected by low occupancy
rates. Inbound tourists to Semporna is likely to
• Grand Liberty Hotel. The 4-star, 300-room hotel is outperform Tawau, driven mainly by arrivals from China.
located in Sembulan area, in the vicinity of Sutera For 2019, most offshore island resorts in Semporna had
Avenue and Harbour City. registered 95% - 100% occupancy rates. The estimated
daily tourists to Semporna is about 2,000 visitors.
Sarawak-based KTS Group plans to develop a leisure
and entertainment waterfront township to be known as KK There are eight new 2 - 4 star hotels currently under
Resort City in Lok Kawi area. The proposed development various stages of development in Semporna. The year
has several precincts comprising a town centre, hotel and also saw the launching of 3-star Grace Hotel in
convention precinct, beach island resort, marina theme Semporna with 105 rooms. Seafeast Hotel & Suites, a
resort, lagoon (central recreation hub), canal edge newly launched 250-room, 4-Star hotel in Semporna, will
residential and resort living community. attract more high-end tourists to this coastal town in the
near future. Another hotel with 199 rooms at Bandar
Sabah’s growing tourism sector has also attracted the Kapalai Square will also be built in 2020.
development of commercial serviced suites to cater to
short-term accommodation market. More developers are OUTLOOK
entering the fray with an increase in the number of such
developments launched in the past 1-2 years. As at end- The Sabah tourism sector remains nature and culture-
2019, there are about 10 developments with over 4,000 driven. Apart from Kota Kinabalu, the majority of towns
units under construction and / or opened for sale. The mainly cater for budget to 2-star hotels with limited
increase in serviced suites and home-sharing higher-range hotels. Hotels in key tourism destinations
accommodation in the coming years will see an such as Semporna recorded high occupancies whilst
increasingly competitive hospitality sector, particularly for towns like Keningau, Tawau, Lahad Datu and Labuan
lower range hotels. remained stable with average occupancies ranging from
45% to 55%.
81
HOTEL
SARAWAK
KUCHING: The hotel sector is stable and expected to perform better with 2019 designated as Visit
Sarawak Year.
STEADY SUPPLY GOOD POTENTIAL into permanent attractions to benefit the hotel and
tourism industry.
The overall hotel sector is expected to benefit from the
Visit Sarawak Year 2019 campaign launched by the There were no addition of star rated hotels in 2019.
Ministry of Tourism. The state hopes to rake in RM 8.79 However, 2019 saw the opening of Roxy Hotel
billion revenue from an anticipated five million visitors for Padungan, a 5-storey budget hotel, converted from old
2019. 2-storey shophouses at Jalan Padungan in the city centre,
which offers 35 rooms.
The star rated hotels in Kuching remained stable for
2019, with average room rates and occupancies There is one hotel currently under construction, i.e. the
remaining generally unchanged. Five star hotels have 19-storey Promenade Hotel located in the CBD area, and
increased their room rates slightly whilst 3 star hotels’ due for completion by 2020.
average room rates have dropped, possibly due to
competition from lodgings by AirBnB offered by private MIRI: BRUNEI VISITORS
individuals which are also convenient and easily
accessible via social media platforms. As the city closest to Brunei, Miri remained the top 5 most
visited cities in Sarawak. Concentration of commercial
The annual Rainforest World Music Festival which is the activities will continue to influence the location preference
biggest draw for tourists to Kuching every year continues of hotel operators and tourists. More than 70% of supply
to be bigger and better and is a huge boost to the is located within the urban-city with at least 1 new hotel
average hotel occupancy rate. rated 3-star hotel coming yearly.
The increased events and programs for Visit Sarawak However, the most prevalent type of hotel in Miri is the 4-
Year 2019, such as WAK, Intercultural Mooncake star hotel as it makes up to 55% of the total rooms
Festival, Sarawak Regatta, Borneo Cultural Sporting supply. The continuous support from Brunei and business
Events, International Medical Congress, Adventure expats from the oil and gas sector will sustain the hotel
Challenge, Sarawak Heritage Food Festival etc., may turn industry in Miri.
HOTELS SUPPLY IN KUCHING
No. of Rooms No. of Hotels

8,000 40
7,000 35
6,000 30
5,000 25
No. of Rooms
No. of Hotels
4,000 20
3,000 15
2,000 10
1,000 5
0 0
2015 2016 2017 2018 2019e 2020f
Source: WTWY Research.
82
HOTEL
SARAWAK
BINTULU: PLENTIFUL SUPPLY OUTLOOK
Bintulu’s hotel market will remain satisfactory in the near There was a 2.68% increase in tourist arrivals in the
term with the average occupancy rate hovering at about first five months of 2019 compared to the same
50%. There was a newly completed hotel in Bintulu in period in 2018. Records showed that tourist arrivals
2019, namely Paragon Fairfield Marriot Hotel (238 was 1,797,634 from January to May this year and
rooms). The Nu Hotel (210 rooms) and Green Hotel 1,750,640 for the corresponding period last year,
(160 rooms) are hotels which came into the market in the 2018. Most of the arrivals are from Brunei, Indonesia
past two years. and China. Sarawak’s hotel industry is anticipated to
remain stable.
Under-construction hotels in Bintulu will contribute
another 160 rooms within one to two years. Looking This year is Visit Sarawak year, with the campaign
further ahead, 8 hotel projects in the pipeline are promoting “Sarawak, More to Discover”. Sarawak is
estimated to inject an additional 862 rooms into the on track of hitting its target of five million tourist
market. By then, the anticipation is that the occupancy arrivals by the end of 2019.
and room rates may be affected by competition.
SIBU: TOURISM POTENTIAL
Sibu’s tourism industry has always been moderate, with

demand and supply in balance over the years. However,
there is growth potential for tourism in Sibu as it is the
gateway to the Rejang River, the longest river in Malaysia.
Hotel investments in Sibu are mainly by local

companies/businesses which prefer budget hotels to cater
more to local business travelers. Incoming supply consists
of a 10-storey budget hotel (144 rooms) and a 6-storey
boutique hotel with 48-rooms, both located within the
commercial areas around the Sibu Star Mega Mall and
Hann Commercial Centre, respectively. Overall
occupancy rates in Sibu remain around 60% with the
average room rate from RM120 to RM170.
ROXY Hotel Padungan

83
FEATURE ARTICLES
85
WHERE ARE THE OPPORTUNITIES AND WHAT LIES AHEAD ?
Shah Alam and Klang (including Kapar and Bukit Raja) play an important role in logistics and warehousing activities, strategically located between sea port, airports and city centres with great
accessibility to major highways. To further encourage growth and development in the sector, attractive incentives are available for companies undertaking activities covering Maintenance,
Repair and Overhaul (MRO), manufacturing and system integration for aerospace industry.
LEGEND
Maintenance, Repair & Overhaul (MRO), High
SHAH ALAM, KLANG, BUKIT RAJA REMAIN AS KEY WAREHOUSING SPOTS Value Manufacturing (HVM), Aerospace
• Notable international players and REITs portfolios i.e. AXIS, MapleTree Upcoming industrial developments
• Expansion of cargo handling capacity indicates potential demand for import/export/transshipment activities; i.e. Westport and Pulau TAIPING
Carey (planned) expansion.
MOVING FORWARD
PLUS
Hulu Selangor
Kuala Selangor
• Proposed Bukit Raja Industrial Gateway, a collaboration with Sime Darby Property and Mitsui as pioneer SERENDAH
WC
• trend in industrial-based township development, positive spillover effects from WCE.
E
LATAR
MRO/AEROSPACE/HVM MANUFACTURING INDUSTRIES
LOGISTICS AND Puncak Alam
GCE Gombak
WITH GROWTH POTENTIAL DISTRIBUTION HUB SUBANG
• 3S (Serendah, Subang, Sepang) with notable players; i.e. Boeing, Airbus Rolls-Royce,
MASkargo, Lazada. Ampang
N KV E
• Creating up to 32,000 high-skill jobs.
KLANG KUALA LUMPUR
• 40% land availability for local/international players/investors. NNKSB
SHAH ALAM FH Hulu Langat
MOVING FORWARD
• Malaysia as the leading aerospace nation in South-East Asia (SEA) by 2030. BUKIT RAJA Petaling
• Estimated 2,000 acres land identified to complement existing aerospace industrial S
SEPANG K E SA
areas.
ELITE
PUTRAJAYA
CYBERJAYA
SKVE
WC E
Kuala Langat
PROPOSED CONNECTIVITY TO FURTHER IMPROVE MARKET ACTIVITIES Abbreviation
1. FH – Federal Highway
• WCE - Connecting to existing highways, i.e. NKVE, NNKSB, FH, SKVE, LATAR, KESAS. 2. WCE - West Coast Expressway Kota Seri Langat
• Serendah - Port Klang Rail Bypass to ease transportation of goods. 3.
4.
PLUS – North South Expressway
NKVE – New Klang Valley Expressway
BANTING
5. KESAS – Konsortium Expressway Shah Alam SEPANG
6. SKVE – South Klang Valley Expressway
7. ELITE – North-South Expressway Central Link
Source: Invest Selangor, MOT, MIDA, CBRE|WTW Research 2019. 8. NNKSB – New North Klang Straits Bypass
Disclaimer: Information contained in this infographic is intended to provide general information purposes only
9. LATAR - Kuala Lumpur Selangor Expressway
SIGNIFICANT
TRANSACTIONS
SIGNIFICANT TRANSACTIONS
MALAYSIA
TRANSACTION
DEVELOPMENT DESCRIPTION VENDOR PURCHASER
PRICE (RM)
KLANG VALLEY
Boustead Hotel and

Royale Chulan Bukit Bintang 400-rooms hotel Hotel Royal Ltd 197,000,000
Resort SB
23-storey office complex,
19-storey office tower Malaysia Pacific Asia New Venture Capital
Wisma MPL 189,000,000
and four-storey retail Corporation Holdings SB
podium
13.61 acres land for SkySierra Development
Datuk Bandar Kuala
Setiawangsa Land mixed development to be (owned by SkyWorld 176,000,000
Lumpur
known as SkySierra Development SB)
AESBI Power System
Pekan Baru Hicom – industrial 15.19 acres piece of
Sdn Bhd (Advance Symphony Warehouse SB 124,000,000
land together with building freehold land
Synergy Berhad)
166.41 acres of land
Development land within Swan Lake City SB & Scientex Park (M) SB
with potential for mixed 123,280,289
Bandar Kundang Fair City SB (Scientex Berhad)
development
Development industrial land A parcel of land with total Sime Darby
Eonmetall Land SB 155,727,468
in Kapar, Klang land area of 420.59 acre Plantatiion Berhad
Freehold land with Leader Cable Industry Maxter Glove
Kapar industrial land 65,000,000
industrial premises Berhad Manufacturing SB
Vacant land with Vienna Home SB
M Luna land located within JL99
development approval for (subsidiary of Mah Sing 94,764,144
Taman Metropolitan Kepong Holdings SB
service apartments. Berhad)
Refurbishment into two ECM Libra Financial
Tune Hotel in Chow Kit Tune Hotel SB 30,528,000
hotel brands Group Berhad
Development land located Prestige Ceramics
27.77 acres of freehold
within Taman Meranti Jaya, Sdn Bhd (Johan Aspect Potential SB 127,000,000
land
Puchong Holdings Berhad)
Klang land located along 6.54 acres commercial CB Land SB (Crest
Gemilang Waras SB 55,000,000
Jalan Langat freehold land Holding Berhad)
NEGERI SEMBILAN
738.62 acres of United Malacca

Tampin Estate HLRB Broiler 51,703,400*
agriculture land Berhad
380.69 acres of United Malacca
Pelin Estate HLRB Processing 26,647,985*
agricultural land Berhad
168.62 acres of Matrix Concepts Holdings
Bandar Sri Sendayan Anonymous 73,451,181.90
agricultural land Berhad
* Transactions handled by CBRE | WTW
88
MALAYSIA
TRANSACTION
PRICE (RM)
PENANG
27 lots of freehold land TPPT SB Mustiara SB 131,000,000

Development land at Simpang (Subsidiary of Tambun
totalling approximately
Ampat, Seberang Perai Indah Land Berhad)
209.54 acres.
Development land at Tasek 6 lots of freehold land Palma Indah SB Scientex (Skudai) SB 109,585,487
Gelugor, Seberang Perai totalling approximately
179.70 acres.
Development land at Tanjung Freehold land of Zenith Urban Ivory Meadows SB 65,000,000
Tokong (Bandar Tanjong approximately Development SB (Subsidiary of Ivory
Pinang, Penang Island) 2 acres. Properties Group Berhad)
Development land at Paya 7 lots of freehold land of Geo Valley SB Aspen Park Hills SB 165,000,000
Terubong, Penang Island 29.046 acres.
1st Avenue Mall at Shopping mall 1st Avenue Mall SB I Homes Properties 153,000,000
Georgetown, Penang Island (Net Lettable Area: SB (Ideal United Bintang
407,076 square feet) International Berhad)
Industrial complex at Bayan 2.067 acres leasehold Zoomic Technology Axis – REIT 20,500,000
Lepas Industrial Park, Penang with unexpired term of 32 (M) SB
Island years
Vacant industrial land at Batu 30-year Lease land of Penang Development Axis – REIT 3,916,479.60
Kawan Industrial Park, 2.498 acres Corporation
Seberang Perai
Industrial complex at Kawasan Freehold with a land area Dynaciate SPI SB M Gudang SB 41,000,000
Perusahaan Valdor, Seberang of approximately 12.625 (Subsidiary of (Subsidiary of MMAG
Perai acres Dynaciate Group Holdings Berhad)
Berhad)
JOHOR BAHRU
Freehold development
Development land located off land measuring 36.81 Iskandar Waterfront
Ekovest Berhad 1,050,000,000
Lebuhraya Sultan Iskandar hectares, Mukim of Pulai, Holdings SB
Johor Bahru.
Freehold development
land measuring 131.95 Malaysia Pacific Amanahraya Development
Development land in Masai 115,000,000
acres, Mukim of Corporation Berhad SB
Plentong, Johor Bahru.
Single-storey warehouse
Warehouse-cum-office with a 3-storey office
Axis Real Estate Investment
building in Port of Tanjung building and ancillary Rancak Beta SB 65,000,000
Trust
Pelepas buildings with 8.18 acres
land
89
MALAYSIA
TRANSACTION
PRICE (RM)
JOHOR BAHRU
Puteri Harbour
Family Entertainment
Themed Attractions
Centre, Marina UEM Sunrise
Integrated commercial development Resorts & Hotels 145,000,000
Walk, Pergola Land Group
Group
& Somerset Puteri
Harbour
Four freehold detached factories with total Nusajaya Tech Park Axis Real Estate
Nusajaya Tech Park 55,800,000
land area of 2.13 hectares SB Investment Trust
Bandar Baru Permas Freehold commercial land of 10.6 acres in Straits View Khong Guan (M)
46,347,840
Jaya Mukim of Plentong, Johor Bahru. Development SB SB
MELAKA
Commercial land of 6 acres, Kota Syahbandar, Sin Heng Chan Sumber Setiamas
Commercial land 14,385,965
Melaka (Malaya) Berhad SB
Estate land (Masjid Tanah Estate) measuring United Malacca Huat Lai Broiler
Estate land 61,078,150 *
876.35 acres Berhad Breeders SB
Estate land (Selandar Estate) measuring 527.46 United Malacca Huat Lai Broiler
Estate land 35,715,750 *
acres Berhad Breeders SB
Development land measuring 15.81 acres along Faithview

Development land Petaling Garden SB 6,200,000 *
Jalan Pulau Gadong, Melaka Ambience SB
Freehold development land of 11.169 acres,

Sinmah Capital
Development land Mukim of Durian Tunggal, District of Alor Gajah, Chin Huan Ngi 7,297,824.60
Berhad
Melaka
Xepa-Soul
Industrial land measuring 18.75 acres in Phase 3
Industrial land Hicom Indungan SB Pattinson 20,418,750
Hicom Pegoh Park
(Malaysia) SB
Agricultural land of 69.63 acres, Mukim of Bukit Lee Seng Yean &
Agricultural land Jasa Idahmas SB 20,000,000
Lintang, District of Melaka Tengah, Melaka Brothers SB
PAHANG
Top Gloss Sdn Bhd

Kinsteel Berhad &
Gebeng Industrial Area 48.24 acres industrial land with factories & APi Trengganu 50,785,609.70
Harvard Vision SB
SB
Bandar Indera Panasonic Malaysia

2.22 acres industrial land with warehouse SP Leveration SB 8,440,000
Mahkota SB
Harn Len Corp Far East Holdings

Rompin, Pahang 2,134 hectares oil palm plantation 183,000,000.00
Berhad Berhad
* Transactions handled by CBRE | WTW
90
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No 25 Lebuh Light Jalan Dato’ Sheikh Ahmad
10200 PENANG P O Box No 190
T : +(6 04) 263 3377 70710 SEREMBAN
F : +(6 04) 263 0359 T : +(6 06) 765 3355
10 E : penang@cbre-wtw.com.my 12 F : +(6 06) 765 3360
Peh Seng Yee, Director E : seremban@cbre-wtw.com.my
E : sengyee.peh@cbre-wtw.com.my Teh Hong Chua, Senior Branch Manager
E : hongchua.teh@cbre-wtw.com.my
Tan Chean Hwa, Associate Director
E : cheanhwa.tan@cbre-wtw.com.my
No 2A & 4A Jalan 52/18

Merdeka Square Section 52
46200 PETALING JAYA
T : +(6 03) 7955 1818
11 F : +(6 03) 7957 8049
E : petalingjaya@cbre-wtw.com.my
Leor Chin Ki Fatt, Assistant Manager
E : leor.chin@cbre-wtw.com.my
C H WILLIAMS TALHAR & WONG (SABAH) SDN BHD
Leong Shin Yau, Managing Director

E : syleong@wtw.com.my
syleong8@gmail.com
Cornelius Koh, Director
E : ckoh@wtw.com.my
ckhoh1955@yahoo.com
2nd Floor Menara MBf
Chong Fui Mei (Karis), Director
1 Jalan Sagunting
E : karischong@wtw.com.my
P O Box 14414
kc5796@gmail.com
88850 KOTA KINABALU
13
T : 088-248 801 Benjamin Mu Vi Ken, Director
F : 088-230 826 E : benjaminmu@wtwskk.com
E : kotakinabalu@wtw.com.my
Lee Siew Ngoh (Agnes), Director
E : agneslee@wtwskk.com
alsn7448@gmail.com
Chan Mon Hueg @ Moon, Associate Director
E : chanmonhueg@wtwskk.com
Harry William Koh, Registered Valuer
E : harrykoh@wtwskk.com
1st Floor Wisma Chee Sing 2nd Floor, Lot 2, Block A

No 48 Jalan Bunga Kenaga RHB Bank Building
P O Box 82229 Metro Commercial Centre, Jalan Kiambang
87032 LABUAN P O Box 60600
T : 087-416 341 91115 LAHAD DATU
F : 087-416 342 15 T : 089-882 393
14
E : labuan@wtw.com.my F : 089-885 088
Chong Fui Mei (Karis), Director E : lahaddatu@wtw.com.my
E : karischong@wtw.com.my Leong Shin Yau, Managing Director
kc5796@gmail.com E : syleong@wtw.com.my
syleong8@gmail.com
93
OUR NETWORK
C H WILLIAMS TALHAR & WONG (SABAH) SDN BHD

305 (1st Floor) Leong Hua Building
Rooms 605-608 6th Floor
Dunlop Street
Wisma Khoo Siak Chiew
P O Box 60394
90000 SANDAKAN
91013 TAWAU
T : 089-217 025
T : 089-774 349
F : 089-272 850
16 18 F : 089-762 287
E : sandakan@wtw.com.my
E : tawau@wtw.com.my
Benjamin Mu Vi Ken, Director
Chan Mon Hueg @ Moon, Associate Director
E : benjaminmu@wtwskk.com
E : chanmonhueg@wtwskk.com
Robin Chung York Bin, Consultant
Desmond Liew, Manager
E : rchung@wtw.com.my
E : desmond@wtw.com.my
Lot 11, 1st Floor

Suria Shopping Centre
Jalan Masak 89000 KENINGAU
T : 087-336 803
17 F : 087-338 803
E : keningau@wtw.com.my
Harry William Koh, Registered Valuer
E : harrykoh@wtwskk.com
C H WILLIAMS TALHAR WONG & YEO SDN BHD
No 26 (1st Floor) Lot 352 Section 54 Lot 1139

Wisma Nation Horizon Miri Waterfront Commercial Centre
Jalan Petanak P O Box 1121
93100 KUCHING 98008 MIRI
19 T : 082-231 331 21 T : 085-432 821
F : 082-231 991 F : 085-411 786
E : kuching@wtwy.com E : miri@wtwy.com
Yip Phooi Leng, Director Ting Kang Sung (Robert), Managing Director
E : ypl@wtwy.com E : rting@wtwy.com
Sublot 54 (Lot 4229) 1st Floor

Parkcity Commerce Square Ph 6 No 10C (First Floor)
Jalan Tun Ahmad Zaidi Jalan Kampung Datu
97000 BINTULU 96000 SIBU
T : 086-335 531 22 T : 084-319 396
20 F : 086-335 964 F : 084-320 415
E : bintulu@wtwy.com E : sibu@wtwy.com
Henry Yeo Hap Soon, Director Hii Wei Jin, Director
Jeffrey Pui Zen Thung, Director E : hiiwj@wtwy.com
E : jeffreypui@wtwy.com
C H Williams Talhar & Wong (B) Sdn Bhd
Unit No 18, 1st Floor

Jaya Setia Square
Simpang 13
Kampung Setia Jaya Bandar Seri Begawan
Bandar Seri Begawan BB2713
23 NEGARA BRUNEI DARUSSALAM
T : 673-2228 050
F : 673-2234 695
E : wtwb@brunet.bn
Kathy Lim, Director
94
CONTACTS
ABOUT THIS REPORT
Aziah Mohd Yusoff PJK Leong Shin Yau

Director, CBRE | WTW Managing Director, WTWS
aziah.myusoff@cbre-wtw.com.my syleong@wtw.com.my
Peh Seng Yee Robert Ting Kang Sung

Director, CBRE | WTW Managing Director, WTWS
sengyee.peh@cbre-wtw.com.my rting@wtwy.com
Tan Ka Leong Michael Chai

Director, CBRE | WTW Manager – Research & Consultancy, CBRE | WTW
kaleong.tan@cbre-wtw.com.my michael.chai@cbre-wtw.com.my
GLOBAL RESEARCH LEADERSHIP
Richard Barkham, Ph.D., MRICS Jos Tromp

Global Chief Economist Head of Research, EMEA
richard.barkham@cbre.com jos.tromp@cbre.com
Neil Blake, Ph.D. Spencer Levy

Global Head of Forecasting and Head of Research, Americas
Analytics spencer.levy@cbre.com
EMEA Chief Economist
neil.blake@cbre.com Henry Chin, Ph.D
Head of Research, Asia Pacific
henry.chin@cbre.com.hk
FOLLOW CBRE | WTW
Published by Printed by:

C H Williams Talhar & Wong Sdn Bhd 197401001098 (18149-U) Maziza Sdn Bhd
CBRE | WTW Kuala Lumpur, Malaysia. 9 Jalan Helang Sewah
December 2019 52100 Kepong Baru, Kuala Lumpur
This report was prepared by the CBRE | WTW Malaysia Research Team, which forms part of CBRE Research – a network of preeminent researchers who collaborate to
provide real estate market research and econometric forecasting to real estate investors and occupiers around the globe.
All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE | WTW. Information contained herein, including
projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and
make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the
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considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of
the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of
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KDN No. PP9013/07/2012 (030726)

Market Outlook MOR2020

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CBRE|WTW RESEARCH | APAC

‘WHEN WILL THE MARKET IMPROVE ? The property market

3 CBRE | WTW RESEARCH | © 2020 CBRE | WTW

MODERATE PERFORMANCE Labour market conditions were stable with employment

CONTRIBUTION OF EXPENDITURE GDP GROWTH BY SECTORS

DESCRIPTION AUTHORITY/AGENCY EFFECTIVE DATE REMARKS

PROJECTS LOCATION COMPLETION YEAR REMARKS

LRT Line 3 Bandar Utama - Klang 2024 Under construction

MRT 2 (SSP Line) Sungai Buloh - Putrajaya 2022 Under construction

Damansara-Shah Alam Sungai Penchala – 2020 Under construction

Sungai Besi-Ulu Kelang Sungai Besi - Cheras - 2020 Under construction

OVERALL LANDED HIGH RISE PURPOSE- SHOP- RETAIL INDUSTRIAL HOTEL

Klang Valley (KV), which constitutes about one-quarter of RETAIL UNCHANGED

TRANSACTION ACTIVITIES IN KLANG VALLEY

The prevailing subdued market would extend to 2020

OPPORTUNITIES IN BUYERS’ MARKET

Total Volume (No. o f Units)

PENANG TRANSPORT MASTER PLAN

The Penang Transport Master Plan (PTMP) will set the

The proposed BL LRT line as the first LRT system in

Proposed Penang South Reclamation (PSR) Bayan Lepas LRT Line

TRANSACTION ACTIVITY RECOVERING

MODERATE SECTOR PERFORMANCE IM has successfully secured committed investments of

TRANSACTION ACTIVITIES (2015 to Jan-Sep 2019)

Volume (No. of Units) Value (RM mil)

A POTPOURRI OF ACTIVITIES ECERDC in partnership with Technische Universitat

INFRASTRUCTURE The beauty and diversity of natural assets in the East

BUYERS’ SENTIMENT IMPROVING SUCCESS OF HOC

RM1.5 mil-RM2 mil

SUPPLY AND PERFORMANCE OF RESIDENTIAL IN Abbreviation: mil. = million, bil. = billion

2015 2016 2017 2018 2Q 2019

Socio-economic variations presented huge differences in

Source: NAPIC, CBRE | WTW Research

CAMPAIGNING AFFORDABLITY Secondary market activity have also declined as reflected

SEREMBAN - HEALTHY MIX

New developments and potential hotspots remain driven

Product differentiation is something to be highlighted. For

The opening of West Coast Expressway (WCE) will

Revising the base year for asset disposal from January

VOLUME OF UNSOLD UNITS BY TYPE VALUE OF UNSOLD UNITS BY TYPE

Abbreviation: mil. = million

VOLUME OF UNSOLD UNITS BY PRICE RANGE VALUE OF UNSOLD UNITS BY

3,929 units RM3,262.17mil

MORE AFFORDABLE UNITS TO BE PROPOSED ALOR SETAR – STATUS QUO

UPWARD TREND IN TRANSACTION ACTIVITY SUPPLY OF LANDED RESIDENTIAL SECTOR

Cumulative Supply (No. of Units)

Annual Supply (No. of Units)

The existing stock of landed houses increased steadily 150,000 20,000

units ranged from 3,000 to 6,000 units per annum.

Annual Supply (No. of Units)

The supply of high-rise units rose tremendously between 0 0

twentyfold from 800 units in 2015 to 15,800 units in 2Q 10,000

FOREIGN OWNER THRESHOLD LOWERED DEVELOPERS RETURNING TO HIGH-RISE

On the other hand, high-rise residences in the sub-sale

A positive turn ahead.

KUANTAN – PLEASANTLY MILD minimum value for 2- to 3-storey terraced, 2- to 3-storey

KOTA BHARU – SMOOTH SAILING

In Kota Bharu, the residential market demand is expected